Tuesday, 6 March 2012

Graduates in the labour market

The ONS has just produced another report from the Labour Force Survey about graduates in the labour market.

The proportion of recent graduates - people who completed a degree or higher education qualification within the last six years - in 'lower skilled' jobs went up from 26.7% in 2001 to 35.9% in 2011

The unemployment rate for new graduates stood at 18.9 per cent in the final quarter of 2011. The rate is slightly lower than the peak of 20.7 per cent following the recent recession. It is also lower than the rate following the 1990’s recession when it peaked at 26.9 per cent in 1993.

The figures are interesting in broad terms, but problematic in detail.

First is the unemployment rate. This is actually the ratio of those unemployed to those who are employed. This is not a terribly good measure for recent graduates, because so many of them are doing something else (like studying or travelling), and so are not included in the calculation.

(Added 7th March: for the 2009/10 cohort, for example, 22% of graduates were doing things six months after graduation that mean they would not have been counted in the calculation. Most of them taking postgraduate courses.)

 That 18.9% in Q4 2011 figure looks even odder when you find that in Q2 2011 it was 18.4% but in Q3 it went down to 15.7% just when you'd expect it to go up with an influx of new graduates on the market. Very peculiar.

Later on the rate for graduates 2 to 4 years after graduation has gone down to 6.7% and for 4 to 6 years, it's at 4.4%.

I'm not sure what the early figures show, but the later ones seem to tell a story, as expected, of steady movement into employment - with the figures at 4-6 years only a little higher than they were pre-recession.

Now, on employment.

The proportion in 'lower skilled' roles went up with the recession (you can see it in the graphs with the report) and is coming down again.

However, the methodology is rather broad when it comes to considering whether role is 'skilled' or 'less skilled' (etc), and is further confused by a change in the occupational classification systems for the data from last year.

The specific change for the new SOC2010 is to reduce the number of jobs classified as 'managerial' (or, 'highly skilled' in this measurement) and to distribute them more appropriately in other job classes - which happen to be counted at lower skills levels, even though they're doing the same jobs in 2011 as they were in 2010. This makes the occupational classification system as a whole better - previously, it overestimated the number of people supposedly in management roles - but does obscure this particular measurement.

Overall, these absolute figures are probably not the most useful but the piece does tell a story - the recession had, and continues to have, a profound impression on the graduate jobs market, which has both upped the unemployment rate, and forced more graduates into less skilled jobs. And it has had a demonstrable affect even on graduates who left university well before the recession.

More graduates have also gone onto further study since the recession (of course, we were predicting this even before the downturn had become a real recession).

Looking at the data, it's difficult to escape the conclusion that we still have some way to go to a full recovery. It took around 5 years for the jobs market to recover fully from the 90's recession. 

We probably have at least 2 years, probably 3 or more, of this kind of graduate labour market to get through before we get back to where we were pre-recession.

But things are improving and the piece also shows more graduates than ever before in employment, even now.

Not as worrying a piece as it could be, but still plenty of food for thought.

(some edits on 7th March - I wrote the original in a bit of a rush - hopefully it makes more sense now)