Graduates’ labour market outcomes during the coronavirus pandemic
28 February 2022
Date: March 2021
Research conducted using data held by the ONS indicated the negative economic impacts of the coronavirus hit recent graduates harder than other groups. Between July and September 2020, 12% of recent graduates were unemployed compared to the national average of 5.1%. However, the research also suggested that graduates were less affected in terms of unemployment than those without a degree.
The coronavirus (Covid-19) pandemic has caused severe economic damage with significant impact on the UK labour market. The UK graduate labour market comprises approximately 14 million people, who will play an important role in the economic recovery. Researchers from the ONS, Middlesex University London and the University of Kent have provided an analysis of the early effects of Covid-19 on graduates’ labour market outcomes.
By investigating changes in the unemployment rate for graduates before and during the pandemic, and graduates’ occupational changes, this research identified the challenges faced by newer graduates. The research highlighted the resilience of graduates overall who may have been more adept at changing professions compared to non-graduates.
This analysis used two versions of the ONS Labour Force Survey (LFS) in the ONS Secure Research Service: the LFS Person dataset and the LFS Longitudinal dataset.
Since 1992, the LFS has been conducted quarterly and is the largest household study in the UK. It provides the government and researchers with official measures of employment and produces widely cited statistics on all aspects of people’s work. This includes variables on demographics, household characteristics, education and training. The LFS Longitudinal dataset links the quarterly LFS Person datasets to allow longitudinal analysis, which can be used to understand individual occupational changes.
Both versions of the LFS provide representative and timely data on labour market trends. This allows the researchers to follow graduates employed in two consecutive quarters and analyse occupation changes in comparison with previous years.
The study analysed graduate data for the period quarter 1 (January to March) to quarter 3 (July to September) 2020, comparing the results with those from 2017, 2018 and 2019. This allowed measurement of changes in unemployment rates and in the distribution of graduate workers across different occupations.
The unemployment rate for the period was compared with graduates (defined as an individual aged between 21 and 64 not currently enrolled in an educational course who has attained a higher education degree) as well as a sub-group of ‘recent’ graduates (comprised of individuals who had graduated within the past five years). Occupations were classified following the Standard Occupational Classification (SOC) one-digit groupings and analysis classified occupational switchers as those who had changed one-digit SOC code between periods.
The research suggests that recent graduates have been hardest hit by the pandemic in terms of unemployment. An average of 6.3% of recent graduates were unemployed, peaking at 12.0% in quarter 3 2020. However, unemployment among all graduates was consistently lower than the total rate of unemployment. Between quarter 1 and quarter 3 2020, the average unemployment rate for all graduates was 3.0% compared with a national unemployment rate of 4.2%.
Unemployment rates for the total UK labour force, graduates and recent graduates (aged 16 to 64) from quarter 1 2017 to quarter 3 2020, non-seasonally adjusted.
The research showed that employed graduates were better able to change occupations between March and July 2020, in comparison to previous years. In quarter 2 and 3 2019, there was an increase of 2.1% of graduates in high-skilled occupations, compared to a 1.0% decrease in the same period in 2020. The researchers suggest the change may have been due to individuals accepting lower-level skilled occupations.
This analysis provided early evidence on graduates’ market labour outcomes during the beginning of the pandemic. It has been widely cited in the media, including articles in the Financial Times, the Telegraph and Bloomberg.
The report co-authors from the Universities of Kent and London Middlesex were awarded additional funding by the Economic and Social Research Council (ESRC) to further investigate the impact of Covid-19 on the labour market. The project will use data within the ONS Secure Research Service to build upon the existing analysis of graduate outcomes and provide policymakers with evidence to support key policy decisions.
Publications and reports
- ONS article: Graduates’ labour market outcomes during the coronavirus (COVID-19) pandemic: occupational switches and skills mismatch
Blogs, news posts, and videos
- Financial Times article, March 2021: One in eight recent UK graduates hit by unemployment
- Bloomberg article, March 2021: Pandemic leaves one in eight recent UK graduates unemployed
- The Telegraph, April 2021: ‘I applied for 157 jobs’: Is the career ladder broken for new graduates?
- People Management article, March 2021: One in eight graduates unemployed because of the pandemic, official figures show
- University Business article, March 2021: Graduate employment fared better during pandemic, ONS figures suggest
- Middlesex University London article, March 2021: Recent graduates facing difficult challenges in jobs market amid COVID-19 discovers MDBUTX-backed study
About the ONS Secure Research Service
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