This article looks at the impact of COVID-19 pandemic on the labour market outcomes of graduates workers in the UK, focusing on unemployment, occupational shifts and skills mismatches.

1. Main points

  • The unemployment rate for graduates, non-seasonally adjusted (NSA), was 4.6% in Quarter 3 (July to Sept) 2020, compared with 5.1% for the overall unemployment rate; the latest (Quarter 4 (Oct to Dec) 2020) NSA figure for the overall unemployment rate was 5.2%.
  • Graduate skill mismatch, defined as the proportion of graduates not employed in graduate occupations, decreased by 5.0 percentage points to 25.5% between Quarter 3 2019 and Quarter 3 2020.
  • Of all graduates who changed occupation but remained in employment in Quarter 2 (Apr to June) and Quarter 3 (July to Sept) 2020, we recorded an outflow of 1.0 percentage point in high-skilled occupations.A smaller proportion of graduates (6.7%) switched occupation in Quarter 3 2020 compared with that of non-graduates (7.0%).

2. Overview

The coronavirus (COVID-19) pandemic has had a marked impact on the UK labour market so far, with the latest period (Quarter 4 (Oct to Dec) 2020) showing further increases in the unemployment rate. Using the Quarterly Labour Force Survey (QLFS) and Longitudinal Labour Force Survey, this work assesses the early impacts of the pandemic on the graduate labour force.

Graduates are among the highest-skilled workers and they play an important role in the economy. Higher levels of skills promote innovation and growth (Barro 2001, Lucas 2015, Mason and others 2008) and are therefore crucial in dealing with the challenges imposed by the pandemic.  Graduates are also more occupationally and geographically mobile, a factor that may support their employment in times of crisis. However, the skill mismatch among graduates is reportedly higher than in other skill groups (Savic and others 2019) and this could hamper productivity performance in the long run.

Our article starts with an overview of graduate numbers for the period Quarter 1 (Jan to Mar) 2017 to Quarter 3 (July to Sept) 2020. Graduate unemployment is compared with the overall unemployment rate, and the unemployment rate for recent graduates, to address the questions of whether graduates are facing deteriorating job prospects¹ and assess how their outcomes compare with non-graduate workers. We then focus on labour market transitions of graduates across occupations. We present a detailed evaluation of occupational switching and skill mismatch in the UK labour market prior to and during the coronavirus pandemic, accounting for variations in the whole economy and across industries.

Our analysis focuses on the first three quarters of 2020, which cover different phases of the coronavirus pandemic, including the first lockdown period (March to June 2020) and the period of limited restrictions during the summer months (July to September 2020). We compare figures for 2020 with earlier data to evaluate how the labour market outcomes of graduates have been affected by the pandemic.

Specifically, our study aims to:

  • analyse movements in the unemployment rate for graduates before and during the pandemic
  • investigate changes in the distribution of graduate workers across different occupations, comparing the situation during the pandemic (Quarters 1, 2 and 3 of 2020) with previous years
  • analyse graduates' occupational shifts
  • explore the incidence of skill mismatch and whether this has been affected by the pandemic
  • investigate changes in the extent of the skill mismatch across industries

In our analysis, we assume there has been a significant reallocation of workers in the light of the pandemic, as workers have moved out of some professions and sectors badly hit by the crisis (for example, pilots in travel and tourism), and into other professions and sectors (for example, nursing and grocery retail). Such reallocation has the potential to affect the skill mismatch in the labour market. The direction of this effect is unknown as displaced workers can either improve their job match, for example, in case of a promotion, or they might not be able to match their skills to new openings in the labour market, in which case the mismatch will increase.

Given the negative association between the skill mismatch and productivity performance, understanding this phenomenon is important in assessing the potential scarring effects that this crisis may cause. Our analysis of the changing labour market conditions of graduates overall and of recent graduates (those who graduated within the past five years) will provide an important outlook for economists and policy-makers.

3. Graduate labour market characteristics

The number of graduates has been steadily increasing in the UK. In 2017, approximately 42% of the 34 million individuals aged 21 to 64 years¹ had a graduate degree. In aggregate, the graduate labour market comprises approximately 14 million of the UK population. Women account for around 56% of graduates in the labour market with a modest increase in their share over time.²

Graduates have specific skills related to their subject type (for example, engineering, accountancy, psychology), as well as more general transferrable skills (writing, communication, critical thinking). Because of these skills, graduates may have greater resilience during times of economic crisis, although the evidence is mixed³. Graduates may therefore be less likely to be unemployed in comparison with those who do not have a degree.

In Quarter 3 (July to Sept) 2020, people aged 25 to 64 years without a degree accounted for 37% of the unemployment rate, followed by those without a degree aged 16 to 24 years (31%). Comparatively, graduates aged 25 to 64 years and young graduates (aged 16 to 24 years) accounted for 15% and 9% of the overall unemployment rate respectively. Individuals aged 25 years or over who hold a higher degree, accounted for 8%. These figures suggest that graduates on average are less likely to experience unemployment than non-graduates. Overall, 76% of individuals who are unemployed do not hold a graduate degree.

The introduction of the UK government's Coronavirus Job Retention Scheme (CJRS) and Self-Employed Income Support Scheme (SEISS) helped to keep unemployment lower than it would otherwise have been during the initial phase of lockdown restrictions. However, total unemployment increased between Quarter 2 (Apr to June) and Quarter 3 (July to Sept) 2020, when in the latter the unemployment rate reached 5.1%.

Unemployment amongst graduates has been consistently lower than the total. The average unemployment rate for graduates between Quarter 1 2017 and Quarter 3 2020 was 3.0%, compared with the total average unemployment rate of 4.2%. However, average unemployment for recent graduates was the highest, averaging at 6.3% over the period and reaching a peak of 12.0% in Quarter 3 2020. This suggests that recent graduates have been hardest hit by the pandemic in terms of unemployment. Nevertheless, the unemployment rate for recent graduates remains below the non-seasonally adjusted youth unemployment rate (aged 16 to 24 years), which stood at 14.2% and 13.6% in Quarter 2 and Quarter 3 of 2020 respectively⁴.  

Documents

Graduates' labour market outcomes during COVID-19: occupational switches and skill mismatch

You may also be interested in these articles:

Sponsored Video

Register, Login or Login with your Social Media account:


Advertisers

Upcoming FE Events

Advertiser Skyscrapers

Latest Education News

Further Education News

The FE News Channel gives you the latest education news and updates on emerging education strategies and the #FutureofEducation and the #FutureofWork.

Providing trustworthy and positive Further Education news and views since 2003, we are a digital news channel with a mixture of written word articles, podcasts and videos. Our specialisation is providing you with a mixture of the latest education news, our stance is always positive, sector building and sharing different perspectives and views from thought leaders, to provide you with a think tank of new ideas and solutions to bring the education sector together and come up with new innovative solutions and ideas.

FE News publish exclusive peer to peer thought leadership articles from our feature writers, as well as user generated content across our network of over 3000 Newsrooms, offering multiple sources of the latest education news across the Education and Employability sectors.

FE News also broadcast live events, podcasts with leading experts and thought leaders, webinars, video interviews and Further Education news bulletins so you receive the latest developments in Skills News and across the Apprenticeship, Further Education and Employability sectors.

Every week FE News has over 200 articles and new pieces of content per week. We are a news channel providing the latest Further Education News, giving insight from multiple sources on the latest education policy developments, latest strategies, through to our thought leaders who provide blue sky thinking strategy, best practice and innovation to help look into the future developments for education and the future of work.

In Jan 2021, FE News had over 173,000 unique visitors according to Google Analytics and over 200 new pieces of news content every week, from thought leadership articles, to the latest education news via written word, podcasts, video to press releases from across the sector, putting us in the top 2,000 websites in the UK.

We thought it would be helpful to explain how we tier our latest education news content and how you can get involved and understand how you can read the latest daily Further Education news and how we structure our FE Week of content:

Main Features

Our main features are exclusive and are thought leadership articles and blue sky thinking with experts writing peer to peer news articles about the future of education and the future of work. The focus is solution led thought leadership, sharing best practice, innovation and emerging strategy. These are often articles about the future of education and the future of work, they often then create future education news articles. We limit our main features to a maximum of 20 per week, as they are often about new concepts and new thought processes. Our main features are also exclusive articles responding to the latest education news, maybe an insight from an expert into a policy announcement or response to an education think tank report or a white paper.

FE Voices

FE Voices was originally set up as a section on FE News to give a voice back to the sector. As we now have over 3,000 newsrooms and contributors, FE Voices are usually thought leadership articles, they don’t necessarily have to be exclusive, but usually are, they are slightly shorter than Main Features. FE Voices can include more mixed media with the Further Education News articles, such as embedded podcasts and videos. Our sector response articles asking for different comments and opinions to education policy announcements or responding to a report of white paper are usually held in the FE Voices section. If we have a live podcast in an evening or a radio show such as SkillsWorldLive radio show, the next morning we place the FE podcast recording in the FE Voices section.

Sector News

In sector news we have a blend of content from Press Releases, education resources, reports, education research, white papers from a range of contributors. We have a lot of positive education news articles from colleges, awarding organisations and Apprenticeship Training Providers, press releases from DfE to Think Tanks giving the overview of a report, through to helpful resources to help you with delivering education strategies to your learners and students.

Podcasts

We have a range of education podcasts on FE News, from hour long full production FE podcasts such as SkillsWorldLive in conjunction with the Federation of Awarding Bodies, to weekly podcasts from experts and thought leaders, providing advice and guidance to leaders. FE News also record podcasts at conferences and events, giving you one on one podcasts with education and skills experts on the latest strategies and developments.

We have over 150 education podcasts on FE News, ranging from EdTech podcasts with experts discussing Education 4.0 and how technology is complimenting and transforming education, to podcasts with experts discussing education research, the future of work, how to develop skills systems for jobs of the future to interviews with the Apprenticeship and Skills Minister.

We record our own exclusive FE News podcasts, work in conjunction with sector partners such as FAB to create weekly podcasts and daily education podcasts, through to working with sector leaders creating exclusive education news podcasts.

Education Video Interviews

FE News have over 700 FE Video interviews and have been recording education video interviews with experts for over 12 years. These are usually vox pop video interviews with experts across education and work, discussing blue sky thinking ideas and views about the future of education and work.

Events

FE News has a free events calendar to check out the latest conferences, webinars and events to keep up to date with the latest education news and strategies.

FE Newsrooms

The FE Newsroom is home to your content if you are a FE News contributor. It also help the audience develop relationship with either you as an individual or your organisation as they can click through and ‘box set’ consume all of your previous thought leadership articles, latest education news press releases, videos and education podcasts.

Do you want to contribute, share your ideas or vision or share a press release?

If you want to write a thought leadership article, share your ideas and vision for the future of education or the future of work, write a press release sharing the latest education news or contribute to a podcast, first of all you need to set up a FE Newsroom login (which is free): once the team have approved your newsroom (all content, newsrooms are all approved by a member of the FE News team- no robots are used in this process!), you can then start adding content (again all articles, videos and podcasts are all approved by the FE News editorial team before they go live on FE News). As all newsrooms and content are approved by the FE News team, there will be a slight delay on the team being able to review and approve content.

 RSS IconRSS Feed Selection Page