Underemployment of college graduates: is doing anything better than doing nothing?

Across low-income countries, limited prospects for high-skill employment and poverty push numerous college graduates into jobs which do not require a college degree. These types of experiences may be advantageous or detracting for the new graduates. In order to examine this issue, we conducted a field experiment in Burundi which elicited preferences of employers with respect to low-skill job experience of
recent college graduates. The experimental design also allowed us to analyze gender discrimination in hiring. The experiment was supplemented with an employers’ survey that aimed to investigate the underlying mechanisms at play. Results indicate that mentioning a low-skill experience on a resume increases the hiring interest of employers on average. Furthermore, the empirical evidence points to the stochastic dominance of a job search strategy that incorporates the signaling of low-skill experience in comparison to presenting a resume devoid of any experience at all. We do not find evidence of gender discrimination at the initial stage of the hiring process. Interviews with
employers suggest that they perceive people with low-skill experience as persevering, hardworking and disciplined rather than persons facing financial difficulties or less competent compared to their classmates. Based on the study’s results, recent graduates should be advised to consider taking up low-skill jobs while waiting for opportunities matching their qualifications, and to signal such experiences to potential employers.