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Charles Levy
Senior Economist
Charles  Levy

Encouraging numbers on graduate employment

Authors: Charles Levy Charles Levy

28 June 2012

Data out today from the Higher Education Statistics Agency confirms just how well our graduates are faring in our labour market compared to those without degrees.

The graph below compares the employment rates of all 18-24 year olds in the third quarter (Q3) each year (sourced from the ONS Labour Market Statistics) with the employment rate of recent graduates for each year.

The full release highlights some of the limitations of the survey. One can read too much into this since the data are not directly comparable. For example, the data on leavers includes many older individuals with previous experience and perhaps even jobs to return to, while the 18-24 year olds grouping from the LFS is too broad. Moreover, the stats are not necessarily proof of the value of graduates. Many may simply be displacing non-graduates in positions where they are just as productive.

Participation in higher education is not only a training activity, it is also a signal of ability and aspirations. We would expect individuals who were motivated to participate in higher education to do better. However the central message remains – UK employment rates for recent graduates have been broadly flat despite incredibly tough external conditions. The earnings data for graduates contained in the report supports this view.

The Work Foundation recognises that economic recovery depends on the growth of knowledge intensive innovations. Innovations rely on individuals using a range of skills but, as we argue in our 2011 report, 'Shaping Up For Innovation', graduate skills have a special role to play. Sustained expansion in their supply will be important for lasting growth. We can take some comfort from the fact our businesses are continuing to demand recent graduates. Yet, we hope they understand that investing in graduate workplace development is also beneficial to long-term business growth.

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