What's Next For The UK Graduate Labour Market?
WHAT'S NEXT FOR THE UK GRADUATE LABOUR MARKET?
Graduate Labour Market Research at Warwick Institute for Employment Research (IER)
Graduate employability is a hot topic in the media at the moment, with much talk about the fierce competition for graduate jobs. But what has really been happening to the UK graduate labour market during the recession? Academics from the Warwick Institute for Employment Research are conducting a large-scale project called Futuretrack which looks at the 2005/2006 cohort of UCAS applicants and analyses their labour market experiences.
Higher education and skills policy are at the centre of debates in the media, politics and academic spheres. Hotly contested topics include the numbers of graduates produced, the value of their degrees, and the rapidly changing landscape of the university fees system in England. Graduate employment issues in particular have been central to these debates, with various statistics highlighting the unprecedented competition for ‘graduate’ jobs, or alleging that too few graduates are entering employment related to their degree, and that increasing numbers of graduates have been finding that the jobs on offer neither match their skills nor reward them for their investment in three or four years of study. Media reports, on the whole, paint a pretty depressing picture of the prospects facing recent graduates. How far are such claims correct? Researchers at the Institute for Employment Research (IER) at the University of Warwick are working to provide an up-to-date and accurate picture of the UK’s graduate labour market.
The Graduate Labour Market (GLM) programme of research at the IER is coordinated by Professor Kate Purcell and Professor Peter Elias. It covers a range of projects on the relationship between higher education and employment, including longitudinal surveys and programmes of interviews to investigate graduates’ early labour market experiences, doctoral study, and the impact of higher education expansion on equal opportunities and economic development. A research project titled Seven Years On (looking at the career paths of ’95 graduates) and the Class of ’99 studies have investigated the changing labour market and its relationship with higher education. At the core of the current programme is Futuretrack, a longitudinal study of applicants for a place in full-time higher education in 2006, exploring the relationship between higher education, their career aspirations and labour market opportunities.
What have we found?
Seven Years On investigated the work histories of people graduating in 1995, and carried out meticulous analysis of existing data on graduate employment and occupational trends, drawing on a wide range of UK data sources in addition to the longitudinal survey conducted that covered graduates from 38 UK higher education institutions representing the full range of undergraduate provision. One of the main outputs of that project was the development of the Standard Occupational Classification (Higher Education) (SOC(HE)), which explicitly addresses the evolving labour market and has been used widely by researchers, careers advisers, policy-makers and pollsters to make sense of the increasingly diverse range of jobs in which UK graduates work. The Seven Years On study found that, in 2002, graduates were doing a wider range of jobs than graduates in the past - partly as a result of economic restructuring, technological change and related change in the demand for highly-skilled labour, partly as a result of changes in the labour supply. Moreover, it did not appear that the expansion of higher education has led to deterioration in opportunities for graduates. The evidence from the early careers of 1995 graduates indicated that there was little evidence of over-supply of graduates or of their widespread failure to get appropriate jobs.
The Class of ’99 study followed graduates from course completion to a point some four years after leaving university, reflecting the recent growth in numbers entering Higher Education and assessing whether the labour market had absorbed the extra graduates at the end of Century. This study found that the market for graduates remained strong, with 85 per cent of employed graduates in graduate-level jobs four years after leaving university, and that employers continued to be prepared to pay a premium to employ graduates, even in jobs that also employ non-graduates. However, there were some indications that by 2003, the rate of increase of the earnings of those who graduated in 1999 does not appear to have kept pace with earnings increases more generally in the economy – perhaps a symptom of decline in the excess demand for graduate skills and knowledge that characterised the situation prevailing throughout the 1990s.
But what about the recession?
What is going on in the graduate labour market at the moment? The large study, Futuretrack, has been following the 2005/2006 cohort of the University and Colleges Admission Service (UCAS) applicants starting from their initial application to higher education. The project is about to survey respondents for the fourth time. This latest survey will ask about their labour market experiences and promises to be especially interesting as the majority of Futuretrack participants have graduated in 2009, part of the so-called ‘Generation Crunch’, the first group of university-leavers to experience the effects of the UK recession and to have paid up to £3,225 of top-up fees per year of university study. Findings from this phase of the research will provide much-needed evidence about the options available to new graduates and the routes they took, whether into the jobs of their dreams, stop-gap employment to pay the bills, or on to further study.
Futuretrack focuses on recent graduates but is concerned to assess their experiences within the wider context of education, careers and occupational change. Themes that the data will allow us to explore include what ‘graduate employability’ means in practice, how the current outcomes and opportunities of 2005-6 HE applicants and other members of their cohort who entered the labour market compare with those of the new graduates, and the impact of debt, gap years and postgraduate study on the experiences and attitudes of graduates. It will explore the question whether it is a good idea for people to get any kind of job, or wait for the kind of job they really want – an issue recently discussed in the Guardian Live Chat session on filler jobs.
Findings from the Futuretrack cohort prior to graduation were largely positive, although they have highlighted the very different experiences, resources and opportunities available to different categories of student. At the third survey, towards the end of their undergraduate courses, over 80 per cent of respondents believed that they possessed the skills employers were likely to be looking for when recruiting for the kind of jobs they wanted to apply for, while only six per cent of respondents disagreed with the statement that they had the skills they thought employers would be looking for. But were they right, and are there jobs for them to apply for? The fourth stage of the survey that is being conducted this Autumn will provide robust evidence to address these questions.
Not a one-off survey
The experience of Futuretrack participants regarding education and work can also be compared to earlier cohorts who graduated in 1995 and 1999, and contribute to our understanding of how the labour market and work organisation have been changing over the last 15 years. What awaits UK graduates in the future? The higher education landscape is in a state of flux, and there are many uncertainties about how it will develop in the equally uncertain economic climate, not to mention the as-yet-unknown effects of introducing variable annual fees up to £9,000, which will come into effect in Autumn 2012. The IER’s research on the graduate labour market is anticipating these questions, and will continue to investigate this complex area, to provide insightful analyses and answers. Watch this space!
Listen to Professors Kate Purcell and Peter Elias, from the Institute of Employment Research, discuss the value of a degree:
Listen to a Knowledge Centre interview with Daria Luchinskaya about graduate skills utilisation in small UK businesses:
The Warwick Institute for Employment Research was established by the University of Warwick in 1981. The IER is one of Europe's leading centres for research in the labour market field. Its work includes comparative European research on employment and training as well as that focusing on the UK at national, regional and local level. The IER is concerned principally with the development of scientific knowledge about the socioeconomic system rather than with the evolution and application of one particular discipline.
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Livanos, Ilias and Nunez, Imanol (2011) The effect of higher education on the gender wage-gap. International Journal of Education Economics and Development . ISSN 1759-5681 Access to file(s) may be restricted.