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New analysis by OFS explores local variations in graduate opportunities

A new report released by @officestudents:  A geography of employment and earnings, presents a method for grouping areas based on measures of local graduate opportunity.
The new measure, published today, contextualises how graduate opportunities are spread across the country, capturing differences in earnings and employment status by local area. For example, it shows that:

  • in England, areas with highest concentration of well-paid graduates (those earning over £23,000) are London, Reading, Slough and Heathrow – where 70 per cent of graduates earn over £23,000 or are in further study three years after graduation
  • areas with the lowest earnings – where 52 per cent of graduates earn over £23,000 or are in high-level study – are mainly in the Midlands, and North and South-West England, with coastal towns facing particular challenges.

The new measure can also be used for comparing outcomes across different student groups, where overall earnings data can often obscure wider regional gaps. For example, while black graduates are significantly more likely to live in areas with more highly paid job opportunities, they remain less likely to enter well-paid employment compared to white graduates. Analysis shows that:

  • black graduates are almost four times more likely than white students to live in the areas with the highest average graduate earnings and rates of professional employment – primarily driven by the number of black graduates living in London
  • however, white graduates living in these areas are significantly more likely to earn above £23,000 or be engaged in further study – 74 per cent for white graduates compared to 60 per cent of black graduates
  • this regional gap is largely obscured at a national level. Overall, 60 per cent of white graduates earn above £23,000 or are in higher-level study three years after graduation, compared to 58 per cent of black graduates.

Chris Millward, director for fair access and participation at the OfS, said:

‘We want all students to progress from higher education with the skills and knowledge to have an enriching life and career. This analysis confirms a familiar picture: talented and well-equipped graduates can be found all over the country, but opportunities for well-paid and highly-skilled work are unevenly spread. It also helps to build our understanding of the particular challenges that face different groups of students in navigating the labour market.

‘Graduates should not feel they have to move to London to get good jobs, or risk being disadvantaged for staying in their home town or city for work. Through the Local Graduates programme, we are funding a range of projects to help boost the employment opportunities for graduates who study and work in the place where they grew up. We will continue to explore ways of supporting students in all parts of the country to access opportunities for rewarding and skilled careers.’

The report, A geography of employment and earnings, presents a method for grouping areas based on measures of local graduate opportunity. This method could help contextualise graduate outcomes by capturing some of the labour market differences experienced by graduates living in different parts of the UK. We demonstrate it with two different measures:

Above-threshold earnings or higher-level study using Longitudinal Education Outcomes (LEO) data. Areas are classified using the proportion of graduates earning over a threshold or studying at a higher level three years after graduation.

Highly skilled employment using Census 2011 data (to be replaced by Graduate Outcomes survey data in future). Areas are classified based on the proportion of all employed people who are in professional or managerial jobs.

For this report the threshold for graduate earnings was around £23,000. It was defined each year as the national median earnings for graduates and non-graduates aged 25 to 29 years. The amount varies in each year to account for the annual increase in average earnings. All graduates earning over this threshold count positively towards the metric whether they earned £24,000 or £100,000.

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