Graduates’ labour market outcomes during the coronavirus pandemic

This research used data made available via the Office for National Statistics (ONS) Secure Research Service, which is being expanded and improved with ADR UK funding.

Authors: Marina Romiti, Vicky Haigney (Office for National Statistics), Dr. Michela Vecchi (University of Middlesex) and Dr. Catherine Robinson (University of Kent)

Date: March 2021

Research summary

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.

Data used

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.

Methods used

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.

Research findings

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%.