Can't get a job? Go back to school!

Caitlin Johnson, 23, may soon find herself among them. A 2009 graduate of Massachusetts Institute of Technology with a B.S. in computer-science and engineering, she says she was unable to land any of the 10 positions she applied for.

So she opted to stay at MIT for her master’s in engineering. Having just finished her first year of the two-year program, Ms. Johnson says she may look for a job at the end of the summer to start after she completes the degree next year. But finding graduate school more appealing and facing a job market that remains weak, she says that she will most likely go on to earn her PhD.

Should Ms. Johnson decide to opt for the job hunt instead of more schooling, she likely will face stiff competition. The number of 20- to 34-year-olds with master’s degrees in the labor force in June was 12% higher than it was two years earlier. And first-time graduate-school enrollment increased 4.5% in 2008 and 6% in 2009 across the country.