Transitioning through Recession? Labor Market Entry Patterns for Hard and Soft Fields of Studies before and during the Financial Crisis

Transitioning from higher education into the labor market is a major life event for graduates and determines and stratifies paths of future career success. However, labor market entry patterns are differ by field of study with those from hard study areas (science, technology and engineering) following a smooth transition, whereas graduates from softer fields of study (humanities and social sciences) experience a longer, more winding road into employment where spells of marginal employment and unemployment are frequent.

This research looks at Germany, a country which is highly standardized and stratified, and compares these subject-specific school-to-work transition patterns before and during the financial crisis. It assumes that pathways into employment are more diverse during times of economic paucity such as after the Great Recession; however, this should not be the case for all subject areas. Instead, hard fields of study are less impacted by economic downturn as they are more protected by their specialized knowledge, showing a clear and direct link between higher education and the labor market, while graduates from softer areas suffer from the crisis and show even more diverse and fragmented transition patterns.

Using data from the German Socio-Economic Panel and employing methods of sequence and cluster analysis, I look at differences and similarities within and across fields of study before and during the economic crisis within the first 24 months after graduation. I demonstrate that there are distinct labor market entry trajectories between hard and soft studies, which differ substantially for latter before and during the Recession. I explain the diversity of career transition patterns as produced by difference in human capital specificities which favors specialized over general skills. Economic fluctuation has a stronger impact on demands of general skills which translates into more fractured transition patterns.