Transcript – Graduates in the labour market 2012
This is a short video looking at graduates in the labour market.
Firstly we will be focusing on recent graduates which we define here as those who have graduated within 6 years of their survey date.
Using this chart we will look at how the types of jobs they have been entering have changed since 2001 and the percentage that enter the higher skill jobs in the economy and the percentage entering the lower skilled jobs.
We can see that in 2001 around 73 per cent, or just under three quarters of all recent graduates who were in work had jobs in those that are thought of as the higher skilled jobs. These are jobs that typically require a competence through post compulsory education and include occupations such as accountants, senior managers, teachers and electricians.
Around 27 per cent of recent graduates who were in work had jobs in the lower skilled group which are generally jobs that require competence gained through compulsory education and some that require little skill. For example the group includes jobs such as machine operatives, retail assistants, cleaners and hotel porters.
Over the last decade the percentage of recent graduates who are in work and in the higher skilled jobs has been falling. In the final quarter of 2011 around 64 per cent, or just under two thirds were in the higher skilled jobs and 36 per cent were in the lower skilled jobs.
Over the past decade more young people have been choosing to stay on in mainstream education and so when interpreting the trends shown on the previous chart it is also useful to look at the numbers of recent graduates who are looking to enter the labour market.
Using this chart we can plot the number of people who graduated within 6 years of their survey interview over the past decade. In 2001 there were around 1.06m recent graduates and this increased to 1.5 million by the final quarter of 2011. This represents an increase of 41 per cent in the number of recent graduates trying to enter the labour market over the period.
As well as looking at the types of jobs recent graduates are doing we can look at the employment rate which shows the percentage of them that are in work.
Here is the line from 2001 onwards and we can plot this along with the employment rate for all graduates regardless of the length of time since they graduated. Here is also a shaded period showing the most recent recession.
We can see that recent graduates tend to have higher employment rates than all graduates and this is mainly because when looking at all graduates they have a slightly older age profile and so includes people not looking to work, for example some graduates who are looking after their family.
At the onset of the recent recession the recent graduate employment rate fell below the all graduate employment rate, reflecting that some new graduates would have found it more difficult to enter the labour market when the economy started to weaken.
Here is the employment rate for non-graduates and we can see it is much lower and one of the main reasons is that they tend to have higher levels of inactivity and unemployment as they consist of an older demographic, although graduates are more likely to be in work than non graduates.
In the final quarter of 2011 around 86 per cent of graduates, both recent and all were in employment and around 72 per cent of non-graduates were in work.
Thinking of the 86 per cent of graduates who are in work we can also look at their average earnings and how this differs depending on the degree subject studied.
Bringing up these bars we can see that graduates with medicine and dentistry type degrees earned the most in 2011 at around £21.29 per hour. Those with a degree in arts earned the least at around £12.06 per hour.
If we plot this line here we can see the average wage for all graduates in 2011 and it was around £15.18 per hour and this line we are plotting now shows an average of around £8.92 for non-graduates.
Note we are only looking at individuals aged 21 to 64 here.
Earlier we showed how the recession had impacted on employment for recent graduates and so in this chart we will look in a little more detail at unemployment for recent graduates from 1992 onwards.
We will split out recent graduates in more detail starting first with new graduates, or those graduating within 2 years of their survey interview. Here is the unemployment rate for those graduating 2 to 4 and also 4 to 6 years ago.
You can see that the new graduates have the highest unemployment rates, reflecting that they are starting to look for work.
If we put on a shaded period showing the most recent recession we can also see that it impacted most on the new graduates. This in part would be down to the fact they were starting to look to enter the labour market when the economy was weak and recruitment was starting to be cut back.
Finally if we look at the unemployment rate for the three groups combined we can see that in the final quarter of 2011 it stood at 9.1 per cent, slightly higher than the unemployment rate for everyone within the UK, which stood at 8.4 per cent.