Attachment 6 The Labour Market Outcomes of Recent Graduates: A review of the Evidence Background paper for the Higher Education Strategy and Plan for Wales Labour Market Intelligence Project D.Blackaby, S.Drinkwater, P.Murphy, N.O Leary, A.Staneva Swansea University April 2014
2 Contents 1. Introduction... 4 2. Higher Education student s enrolments at HEIs in the UK... 5 3. HE enrolments at Welsh HEIs... 8 4. The HESA Micro-data... 9 5. Graduate migration and labour market outcomes of 2008/09 leavers... 11 6. Regional overview of graduate employment... 15 7. Labour market outcomes... 16 7.1. Graduate employment contracts and employer size... 18 7.2. Graduate jobs... 20 7.3. Industrial sector... 23 7.4. Estimating employment outcomes associated with qualification... 24 7.5. Graduate earnings... 26 7.6. Earnings by unitary authority within Wales... 30 Institution effect... 31 7.7. Returns to education... 33 7.8. Graduates job satisfaction and feedback... 35 7.9. Employment outcomes of Economics graduates... 40 8. Changing structure of the UK economy and labour market demand... 41 Summary and conclusion... 47 Figures Figure 1: Annual change in student population by country of institution, 2004/05 to 2011/12... 7 Figure 2: %age of UK domiciled First-degree leavers from 2008/09 in employment within the UK regions... 13 Figure 3: Proportion of UK domiciled postgraduate leavers 2008/09 in employment within the UK regions. 13 Figure 4: Typology of graduates mobility (% of those with Welsh connection)... 15 Figure 5: Employment of 2008/09 graduates by regions... 16 Figure 6: Destinations of UK domiciled leavers by all levels of qualification obtained and activity 2002/03, 2004/05, 2006/07 and 2008/09... 17 Figure 7: Welsh graduates employed in Wales and England by employer size band, 2012... 19 Figure 8: Occupational profile of Welsh-domiciled graduates by highest qualification obtained, 2012... 21 Figure 9: Occupational profile of employed Welsh and non-welsh domiciled graduates, 2012... 21 Figure 10: Occupational profile of graduates employed in Wales by gender (%), 2012... 22 Figure 11: Industrial profile of graduates employed in Wales by age (%age of graduates in each sector), 201224
3 Figure 12: Graduate gross annual salary ( ) by highest qualification obtained, 2012... 26 Figure 13: Job satisfaction of graduates, 2012... 38 Figure 14: Satisfaction of graduates by age, 2012... 38 Figure 15: Economics graduates activity outcomes three years after graduation... 40 Figure 16: Occupational profile of Welsh-domiciled economics graduates, 2012... 41 Figure 17: Industry profile of Welsh-domiciled economics graduates, 2012... 41 Tables Table 1: All student enrolments on HE courses by level of study, mode of study and domicile 2007/08 to 2011/12.6 Table 2: All student enrolments on HE courses at Welsh HEIs 2009/10 and 2010/11...7 Table 3: %age change 2010/11 to 2012/13 in enrolments at Welsh HEIs by institution, level and mode...8 Table 4: Data description HESA Destination of leavers 2008/09... 10 Table 5: Distribution of full-time UK domiciled undergraduate students by level of study, region of domicile and region of HE institution, 2011/12... 12 Table 6: Activity profile of Welsh and Non-Welsh domiciled graduate leavers 2008/09... 17 Table 7: Activity profile of graduate leavers 2008/09 employed in South West and Mid Wales... 18 Table 8: Employment basis of Welsh and Non-Welsh graduate leavers, 2012... 19 Table 9: Occupational distribution of employed Welsh and Non-Welsh graduates, 2012... 20 Table 10: Occupational profile of graduates employed in Wales by age (%), 2012... 22 Table 11: Occupational profile of graduates employed in South West and Mid Wales (%), 2012... 23 Table 12: Industrial profile of graduates employed in Wales (%), 2012... 23 Table 13: Marginal effects (%) on the probability of employment in the UK- Males and Females... 25 Table 14: Graduate gross annual salary ( ) by subject area studied, 2012... 27 Table 15: Graduate gross annual salary ( ) by occupations, 2012... 27 Table 16: Graduates earning functions by gender, overall sample... 29 Table 17: Average gross annual earnings ( ) by workplace Welsh Unitary Authority 2012... 30 Table 18: Graduate gross annual salary ( ) by HE institution region, 2012... 32 Table 19: Destinations of UK domiciled leavers 2008/09 by institution mission group and view of HE experience32 Table 20: Gross annual salary ( ) by mission groups... 32 Table 21: Returns to different institution mission groups, OLS earnings equations... 33 Table 22: Earnings returns to higher-level degrees relative to those holding first-degrees, 2012... 34 Table 23: Earnings returns to higher-level and first-degrees all by region of employment... 35 Table 24: Earnings returns to qualifications by region of employment, 2012... 35 Table 25: Earnings returns to PhD, Master and first-degrees relative to lower than first, 2012... 36 Table 26: Returns to PhD, Master and First-degrees relative to lower than first, by region, 2012... 36 Table 27: Course good value for money, 2012... 37 Source: DLHE Survey 2008/09. Notes: Authors analysis.table 28: Marginal effects from ordered probit on graduates job satisfaction in the UK... 38 Table 29: Preparation for career (%), Welsh-graduates... 40 Table 30: Average annual rate of change in employment by industry sector, Wales and the UK... 42 Table 31: Changes in the Industrial Composition of Employment in Wales, 1990-2020... 44 Table 32: Changes in the Industrial Composition of Employment in the UK, 1990-2020... 45 Table 33: Labour market outcomes of Welsh graduates stayers, movers and returners... 48
4 1. Introduction Higher Education student numbers in the UK and Wales have been increasing over the long term because of the policy priority of the UK Government to expand Higher Education in order to meet rising skill needs and to improve the UK s international economic competitiveness. Recent evidence from the Office of National Statistics (ONS) revealed that the %age of the population classed as graduates has been rising steadily from 17% in 1992 to 38% in 2013. In 2013 the graduate employment rate stood at 87% which was higher than the employment rate for those educated to A level standard (83%), A* to C grade GCSE standard (76%) and the rates for those with other qualifications (70%) or no qualifications (47%). A similar view about the country s requirements for a growing HE sector and generating more highly qualified and skilled people has been taken by the Welsh Government. In particular, the growing knowledge economy is seen as providing substantial potential benefits to Wales 2, where one of the key actions set out by the Government program introduced in September 2011, was to drive growth and sustainable jobs. The Welsh Government consultation on Wales Science Policy highlights the importance of the skills of the people and having sufficient talent and technological strengths in the region 3. The economic agenda in the WAG strategic framework for economic development in Wales also gives recognition to the importance of having a skilled, innovative and entrepreneurial workforce 4. Hence, it is of high importance that Higher Education Institutions (HEI) in Wales works together to ensure their graduates have the skills and qualification demanded by employers (Tyers et al., 2006). Attracting and retaining the young graduates is crucial to local and regional economic performance of the Welsh economy. question the relationship between graduates education, earnings, and expectations about work and jobs 5. The current research aims to provide upto-date evidence on recent trends and developments in the graduate labour market. The report focuses solely on Welsh-born graduates and some interesting differences are revealed according to whether or not the respondents have graduated from a Welsh HEI. In order to meet these aims, the research was set the following key objectives: -Provide information on earnings of recent young graduates and their movement into graduate jobs, occupational pathways for different subject groups, the use of subject/discipline knowledge gained in higher education and the use of skills learned in higher education. -Examine Welsh graduates (i.e. those born in Wales) feedback on value of study programmes and their job satisfaction. The study also examines in which subjects graduate premiums are available. This will allow more informed decisions to be made, both on the part of the (potential) student and policy makers, when setting future tuition fee levels. The main source of information about the Welsh graduate labour market comes from the Higher Education Statistics Agency (HESA) data. The HESA Destinations of Leavers from Higher Education (DLHE) 2008/09 contains information on all United Kingdom (UK) and European Union (EU) domiciled students up to 3.5 years after they have been qualified. The HESA collects information on the characteristics of applicants to Higher Education Institutions (HEIs), their satisfaction with course taken and career to date. Research aims and objectives Given the recent trends in Higher Education in Wales, existing research has already called into
5 For the purposes of this report we use the following general terms: graduates individuals who have gained an undergraduate or higher-level degree from a higher education institution in the UK; Higher education qualifications below degree level all other sub-degree qualifications (eg. HNC, HND, DipHE and, more recently, foundation degrees). Individuals studying on these courses are classified in the HESA student statistics as other undergraduate students; Graduates with higher degrees individuals with postgraduate qualifications including masters graduates, individuals with doctorates and a range of other qualifications higher than a degree; Higher education institution (HEI) all institutions in the UK currently offering higher education courses (but not further education colleges with HE students); Welsh-domiciled graduates those who were living in Wales prior to starting their HE study; similarly graduates domiciled in the rest of the UK were those living outside Wales but in the UK prior to HE study. In the report the following typology of groups have also been utilised: Stayers: these individuals are domiciled in Wales prior their entry to HE, they have chosen to study in Wales and go on to work in Wales. Movers: these are individuals who are domiciled in Wales prior to their entry to HE, and who left Wales to study and who remain outside Wales to work. Returners: these individuals are domiciled in Wales prior to their entry to HE, choose to leave Wales to study elsewhere, but return to work in Wales. Others: these are all other graduates who come to work in Wales, but who were neither domiciled in nor studied in Wales prior to this point. The report is structured as follows. Section 2 and 3 provide an overview of recent trends in HE student s enrolments and qualifications at HEIs in the UK. Section 4 describes the HESA micro-data, followed by examination of the routes followed by Leavers from HEIs 2008/09 follow-up respondents upon completion of their studies, detailing the experiences of employment, occupational pathways, further study and unemployment. The final section draws together the main conclusions from the research findings. 2. Higher Education student s enrolments at HEIs in the UK This section uses data and other sources (e.g. policy papers) to set the background and context for the research study. It highlights a number of key issues related to recent trends and developments in the HE and graduate labour market, mainly in the UK. The differences between Wales and the UK are also noted. As Table 1 indicates the total number of HE enrolments at the UK HEIs stood at 2,496,645 in 2011/12, showing a 4% increase from 2008/09. Postgraduate and undergraduate enrolments increased by 6% and 4% respectively between 2008/09 and 2011/12. Postgraduate numbers have increased each year from 2007/08 to 2010/11 decreasing for the first time in 2011/12. Undergraduate enrolments have increased each year over the same time frame apart from a slight decrease in 2010/11. Similarly, the HE student population in Wales has grown to around 131,000 in 2010/11, which represents approximately an increase of 2% from 2009/10. Postgraduate enrolments increased by 7% and undergraduate enrolments increased by 1% between 2009/10 and 2010/11 (see Table 2), which is higher compared to the %age changes in enrolment rates for the UK. Changes in the overall student numbers had varied between each of the nations within the UK (Figure 1). Like the UK as a whole, these changes in total populations from year to year have been shaped by a range of factors, from changes in policy at a national level to fluctuating levels of students demand in different localities and subject areas.
6 Table 1: All student enrolments on HE courses by level of study, mode of study and domicile 2007/08 to 2011/12 All UK HEIs Postgraduate 2007/08 2008/09 2009/10 2010/11 2011/12 % Change 2009/10 to 2010/11 % Change 2008/09 to 2011/12 Full-time UK 115 335 119 285 131 590 132 190 132 785 0% 11% Other EU 29 355 30 795 34 195 36 885 37 090 8% 20% Non-EU 103 695 117 920 132 475 140 935 139 550 6% 18% Total 248 380 268 000 298 260 310 015 309 425 4% 15% Part-time UK 218 320 234 145 242 720 242 840 226 010 0% -3% Other EU 12 930 13 490 13 385 12 910 12 375-4% -8% Non-EU 21505 21 180 24 345 22 955 20 695-6% -2% Total 252 755 268 815 280 450 278 705 259 080-1% -4% All modes UK 333 655 353 430 374 310 375 030 358 800 0% 2% Other EU 42 285 44 285 47 580 49 795 49 465 5% 12% Non-EU 125 200 139 100 156 820 163 890 160 245 5% 15% Total 501 135 536 815 578 705 588 720 568 505 2% 6% Undergraduate Full-time UK 1 086 640 1 114 865 1 160 870 1 180 105 1 212 025 2% 9% Other EU 57 360 61 175 66 080 69360 73 660 5% 20% Non-EU 88 005 95 995 106 950 117865 126 295 10% 32% Total 1 232 005 1 272 035 1 333 900 1367330 1 411 975 3% 11% Part-time UK 544 020 558 790 552 440 517 935 490 590-6% -12% Other EU 12 505 12 200 11 385 10 960 9 430-4% -23% Non-EU 16 440 16 220 16 990 16 355 16 145-4% 0% Total 572 965 587 205 580 810 545 250 516 165-6% -12% All modes UK 1 630 660 1 673 655 1 713 310 1 698 040 1 702 610-1% 2% Other EU 69 865 73 375 77 465 80 320 83 090 4% 13% Non-EU 104 445 112 215 123 940 134 220 142 440 8% 27% Total 1 804 970 1 859 240 1 914 715 1 912 580 1 928 140 0% 4% All levels Full-time UK 1 201 975 1 234 150 1 292 460 1 312 295 1 344 810 2% 9% Other EU 86 715 91 970 100 275 106 250 110 745 6% 20% Non-EU 191 695 213 915 239 425 258 795 265 845 8% 24% Total 1 480 385 1 540 035 1 632 160 1 677 345 1 721 400 3% 12% Part-time UK 762 340 792 935 795 160 760 775 716 600-4% -10% Other EU 25 435 25 690 24 765 23 870 21 805-4% -15% Non-EU 37 945 37 395 41 335 39 310 36 840-5% -1% Total 825 720 856 020 861 260 823 955 775 240-4% -9% All modes UK 1 964 315 2 027 085 2 087 615 2 073 070 2 061 410-1% 2% Other EU 112 150 117 660 125 045 130 120 132 550 4% 13% Non-EU 229 640 251 310 280 760 298 110 302 680 6% 20% Total 2 306 105 2 396 055 2 493 420 2 501 295 2 496 645 0% 4% Source: Higher Education Statistics Agency Limited 2013.
% change % change 7 Table 2: All student enrolments on HE courses at Welsh HEIs 2009/10 and 2010/11 2009/10 2010/11 % Change 2009/10 to 2010/11 Postgrad Undergrad Total Postgrad Undergrad Total Postgrad Undergrad Total Wales HEIs Full-time UK 6 550 65 045 71 600 6 710 65 690 72 400 2% 1% 1% Other EU 1 045 2 795 3845 1 125 2 765 3 890 7% -1% 1% Non-EU 6 670 5 905 12 575 8 295 7 245 15 540 24% 23% 24% Total 14 265 73 750 88 015 16 130 75 695 91 830 13% 3% 4% Part-time UK 9 685 22575 32 260 10 040 22 275 32 315 4% -1% 0% Other EU 685 2 320 3 005 695 1 870 2 565 2% -19% -15% Non-EU 3 680 930 4 610 3 565 730 4295-3% -21% -7% Total 14 050 25 825 39 870 14 295 24 880 39175 2% -4% -2% All modes UK 16 235 87620 103 855 16 750 87 965 104 715 3% 0% 1% Other EU 1 730 5115 6 845 1 820 4 635 6 455 5% -9% -6% Non-EU 10 350 6835 17 185 11 860 7 975 19 835 15% 17% 15% Total 28 315 99 570 127 885 30 430 100 575 131 005 7% 1% 2% Source: Higher Education Statistics Agency Limited 2013. Figure 1: Annual change in student population by country of institution, 2004/05 to 2011/12 England Wales 5% 4% 3% 2% 1% 0% 5% 4% 3% 2% 1% 0% -1% -2% -3% Scotland Northern Ireland 5% 4% 3% 2% 1% 0% -1% -2% -3% 8% 6% 4% 2% 0% -2% -4% -6% -8% -10% Source: Higher Education Statistics Agency Limited.
8 3. HE enrolments at Welsh HEIs Table 3 examines changes in enrolment rates between 2010/11 and 2012/13 at Welsh HEIs. Two of the nine Welsh institutions saw a fall in the number of all first year entrants. The largest %age decline in total undergraduate students, compared with 2010/11, was seen at Glyndŵr University (5.7 %age fall), whilst the greatest increase was seen at University of Wales Trinity Saint David. Swansea University saw an increase in the number of first year overseas enrolments (non-eu), and 8.2% of enrolments at Swansea University were at postgraduate level. The next highest proportion was at University of Wales Trinity Saint David. Table 3: %age change 2010/11 to 2012/13 in enrolments at Welsh HEIs by institution, level and mode Mode of study Postgraduate Domicile Institution UK Other EU Non- EU Total postgraduate students Total (numbers) 2010/11 Total (numbers) 2012/13 Aberystwyth University 10.1% -15.4% -6.8% -8.9% 25.0% -1.4% 1800 1775 Bangor University 7.8% -0.5% -1.2% -8.3% 20.5% 4.9% 2765 2900 Cardiff University -7.2% -8.3% -10.8% -21.8% 2.0% -7.7% 8150 7520 Cardiff Metropolitan University 43.6% -61.1% 25.7% 5.3% -43.2% -24.1% 5100 3870 University of Glamorgan -8.0% -1.9% -3.4% 38.6% -14.9% -5.2% 4025 3815 Glyndŵr University 3.2% -4.1% -5.5% -11.1% 4.9% -0.4% 1390 1385 University of Wales, Newport -42.1% 3.1% 4.7% 18.2% -55.1% -14.5% 2110 1805 Swansea University 2.7% 24.3% 16.5% 3.0% -5.8% 8.2% 2265 2450 University of Wales Trinity St. David 24.6% 58.7% 82.6% -43.8% -8.6% 38.2% 1520 2100 Total Wales -1.7% -17.8% -3.1% -8.5% -18.1% -9.2% 30430 27620 Institution Mode of study Fulltime Parttime Fulltime Parttime UK Undergraduate Other EU Non- EU Domicile Total undergrad students Total (numbers) 2010/2011 Total (numbers) 2012/2013 Total HE students Aberystwyth University 8.7% -7.4% 3.8% 1.2% 52.2% 5.4% 9340 9840 4.3% Bangor University -1.1% 12.8% -0.9% 4.8% 18.3% 0.6% 8410 8460 1.7% Cardiff University 3.4% -6.2% -0.8% 4.9% 25.9% 1.6% 20695 21020-1.0% Cardiff Metropolitan 4.0% -13.7% -0.4% -4.3% 29.9% 2.2% 8385 8570-7.7% University of Glamorgan 0.1% 7.9% 3.4% -19.4% -1.5% 2.1% 16185 16530 0.7% Glyndŵr University 1.7% -13.4% -11.4% -26.0% 35.9% -5.7% 7570 7135-4.9% University of Wales, Newport 0.1% 0.8% 0.6% -45.5% 47.1% 0.6% 7930 7975-2.6% Swansea University -2.9% 0.0% -4.6% -10.3% 24.4% -2.5% 12215 11910-0.8% University of Wales Trinity St. David 118.3% 43.2% 113.8% -16.7% -35.1% 87.6% 5185 9725 76.4% Total Wales 1.8% -3.1% 0.2% -16.3% 14.9% 0.6% 100575 101165-1.7% Source: Author s calculations from HESA, 2010/11 and 2012/13 students by institution.
9 4. The HESA Micro-data This section discusses the data used in the current report and presents some descriptive statistics of the main variables of interest. The data used comes from the Destinations of Leavers from Higher Education (DLHE) 2008/2009 Survey, carried out by the Higher Education Statistical Agency (HESA). The survey has been organised in two stages: the first stage is a census of individuals who have completed higher education courses in the UK. This stage was carried out approximately six months after the course ended and is referred to as the Early Survey. The second stage is a follow-up survey that looks at the destinations of leavers up to 3.5 years after they qualified. This stage is referred to as the Longitudinal Survey. The Longitudinal Survey, by contrast, is not a census survey but is instead based on a sample of the students who responded to the corresponding Early Survey. employment in Powys and Ceredigion. The table shows some diversity in the characteristics of the two groups. For example, the average annual gross income of the Welsh graduates was 26,760, which compares to 30,792 for non-welsh students. In the case of qualification, about 23% of Welsh-domiciled students have a postgraduate degree, and 63.8% a first-degree, which compares to 25.1% and 67.5% respectively for no-welsh domiciled leavers. The highest is the proportion of non-welsh-domiciled postgraduate students in self-employment (5.5%) as compared to Welsh-domiciled postgraduates (3.9%). The questionnaire covered the following topics: main activity on 26 November 2012 (all leavers); details of current employment (leavers in employment); details of course and qualification aims (leavers in further study); other qualifications obtained since 2008/09 (all leavers); satisfaction with course taken in 2008/09 and career to date (all leavers); additional questions for those who completed a research degree in 2008/09. The sample means of the main variables of interest are shown in Table 4 and more detailed descriptive discussions are given in the next sections. For many of the figures and tables presented in the current report we split the sample into two groups, Welshdomiciled graduates and non-welsh domiciled graduates 6. It can be seen that the employment rate for Welsh domiciled students in 2012 was about 86% that compares to 84% for Non-Welsh defined students. About 6% of the Welsh domiciled graduates were employed in Swansea, and less than 2% found their 6 Welsh graduates are defined based on domicile of their origin.
10 Table 4: Data description HESA Destination of leavers 2008/09 All graduates Postgraduates Undergraduates Welsh domiciled Non- Welsh domiciled Welsh domiciled Non- Welsh domiciled Welsh domiciled Non- Welsh domiciled In employment 85.7 84.4 86.3 84.5 85.6 84.3 Employed in Wales 57.6 0.6 56.9 0.6 57.8 0.6 Employed in Powys 1.8 0.0 1.5 0.0 1.8 0.0 Employed in Ceredigion 1.5 0.0 1.8 0.0 1.5 0.0 Employed in Pembrokeshire 2.4 0.0 1.9 0.0 2.5 0.0 Employed in Carmarthenshire 3.3 0.0 2.6 0.0 3.5 0.0 Employed in Swansea 6.2 0.1 5.5 0.0 6.4 0.1 Employed in Neath Port Talbot 2.3 0.0 3.2 0.0 2.0 0.0 Males 40.2 41.0 40.9 44.7 40.0 39.8 Average gross annual earnings ( ) 26,760.8 30,792.3 32,755.2 37,911.3 25,058.1 28,456.9 Age 18-20 3.6 2.5 0.0 0.0 4.6 3.4 Age 21-24 56.4 62.0 30.7 32.2 64.0 72.0 Age 25-29 11.5 12.6 23.8 28.0 7.9 7.5 Age 30 and more 28.5 22.8 45.5 39.8 23.4 17.1 Postgraduate 22.8 25.1 - - - - First degree 63.8 67.5 - - - - Other undergraduate 13.4 7.4 - - - - Employer size 1 to 49 22.6 22.6 19.5 18.4 23.6 24.0 Employer size 50 to 249 17.9 19.2 20.6 20.9 17.1 18.6 Employer size 250 or more 59.4 58.3 59.9 60.6 59.3 57.5 Permanent contract 74.7 74.4 76.4 73.3 74.2 74.8 In self employment 3.5 4.7 3.9 5.5 3.4 4.4 More than 5 jobs since graduation 7.1 6.8 7.0 4.6 7.1 7.5 Subject studied Medicine & dentistry 1.6 2.5 1.8 3.1 1.6 2.3 Subjects allied to medicine 10.2 7.9 11.2 6.8 9.9 8.3 Biological sciences 7.7 8.7 3.5 6.7 8.9 9.4 Veterinary science 0.2 0.2 0.0 0.1 0.3 0.2 Agriculture & related subjects 1.4 0.9 1.0 0.7 1.5 1.0 Physical sciences 6.3 6.9 7.0 9.9 6.1 5.9 Mathematical sciences 1.3 2.4 0.7 2.0 1.4 2.6 Computer science 3.3 3.8 3.4 2.9 3.3 4.1 Engineering & technology 4.9 6.1 5.5 9.3 4.6 5.0 Architecture, building & planning 2.7 2.3 2.5 2.0 2.8 2.4 Social studies 8.1 9.2 7.2 7.2 8.3 9.9 Law 4.2 3.4 5.7 3.2 3.8 3.4 Business & administrative studies 10.1 11.3 8.8 11.0 10.5 11.4 Mass commun & documentation 2.8 2.3 1.9 1.8 3.1 2.5 Languages 6.1 7.8 2.8 3.7 7.1 9.2 Historical & philosophical studies 5.2 5.2 3.9 3.6 5.6 5.8 Creative arts & design 7.5 7.4 2.9 4.0 8.9 8.5 Education 15.3 10.7 30.2 22.1 10.9 6.9 Combined 1.1 1.1 0.0 0.1 1.4 1.4 3010 45695 685 11466 2325 34229 Source: DLHE Survey 2008/09. Note: Other studies not shown in the table, which are less than 2, includes veterinary and combined studies. Author s analysis.
11 5. Graduate migration and labour market outcomes of 2008/09 leavers This section examines the routes followed by leavers from HEIs 2008/09 follow-up respondents upon completion of their studies, detailing the experiences of employment, further study and unemployment. The labour market information, presented in this section is derived from the activity histories provided by respondents. We display their graduate jobs, the occupational pathways for different subject groups, the use of subject/discipline knowledge gained in higher education and the use of skills learned in higher education. We then turn our attention to the experience of employment and attempt to unravel the factors contributing to graduate satisfaction in these early career profiles. We also provide an insight of the extent of graduate migration between the home nations of the UK using more recent data. Given the recent HE trends, it is interesting to determine the extent to which students in Welsh HEIs were originally domiciled in Wales or whether they have migrated from other parts of the UK to Wales in order to study. Attracting and retaining graduates is crucial for the local regional economy and the research highlights that a region s ability to generate, retain and attract graduate workers is linked to the employment opportunities available relative to other locations. Recent studies by Mosca and Wright (2010) and Bristow et al. (2011) have shown that although the majority of undergraduates stay in their country of domicile to study, there is a considerable amount of movement, particularly so for Wales-domiciled students. Coombes et al. (2003) examine the preferences of graduates from Welsh Higher education institutions when seeking employment and conclude that the most important factors for graduates are job satisfaction and career prospects. Bristow et al. (2011) confirm that Wales low retention rate of home students in 2009/10 was more pronounced when compared to England and Scotland. Using HESA data, Faggian and McCann (2009) also confirm that the retention rate in Wales averages 58% over the period from 1996/97 to 1999/00. Furthermore, Wright (2011) shows that Yorkshire and Humberside, the North East and the East Midlands have experienced an increase in younger graduates as a proportion of their working age populations over the past years, which they suggest was due to the increased public sector demand in these regions. Finally, there is some research which suggests that graduate mobility has changed over time 7 and different graduates have different propensities to migrate. Mosca and Wright (2010) find that migration is a selective process with graduates with certain characteristics having higher probabilities of migrating to other regions of the UK. Characteristics that appear to be important include class of degree, subject studied, type of institution attended. Student mobility This analysis has been confirmed by Table 5, which reveals a relatively low retention rate in Wales compared to the other home nations. About 65% of Welsh domiciled undergraduate students studied in Wales, whilst 95.2% of English domiciled students studied in England. In terms of absolute flows of students, the outflow of Wales-domiciled students to study in England (17,190) is less than the inflow of English-domiciled students (29,610) coming to Wales to study. 7 See for example, Hoare and Corver (2010).
12 Table 5: Distribution of full-time UK domiciled undergraduate students by level of study, region of domicile and region of HE institution, 2011/12 Region of domicile London England (other regions) Region of institution England total Wales Scotland Northern Ireland First degree London 92 440 81 615 174 050 2 055 2 140 90 England (other regions) 62 325 647 445 709 770 27 330 12 050 505 England region unknown 445 1 315 1 760 225 155 - England total 155 210 730 370 88 5580 29 610 14 345 600 Wales 1 820 15 370 17 190 33 195 380 25 Scotland 870 3 905 4 775 155 91 355 50 Northern Ireland 810 8 440 9 250 435 3790 28 255 Jersey and the Isle of Man 245 2 645 2 890 190 175 15 UK region unknown 110 195 305 15 15 20 First degree total 159 065 760 925 919 990 63605 110 055 28 965 First degree %age of institution region London 51.8% 45.8% 97.6% 1.2% 1.2% 0.1% England (other regions) 8.3% 86.4% 94.7% 3.6% 1.6% 0.1% England region unknown 20.9% 61.4% 82.4% 10.4% 7.2% 0.0% England total 16.7% 78.5% 95.2% 3.2% 1.5% 0.1% Wales 3.6% 30.3% 33.8% 65.4% 0.7% 0.1% Scotland 0.9% 4.1% 5.0% 0.2% 94.8% 0.0% Northern Ireland 1.9% 20.2% 22.2% 1.0% 9.1% 67.7% Jersey and the Isle of Man 7.5% 80.9% 88.4% 5.8% 5.3% 0.5% UK region unknown 31.1% 55.1% 86.2% 4.5% 3.7% 5.6% First degree total 14.2% 67.8% 82.0% 5.7% 9.8% 2.6% Other undergraduate London 9 750 3 305 13 055 70 15 - England (other regions) 5 145 61 510 66 655 705 115 - England region unknown 95 95 185 5 - - England total 14 990 64 910 79 900 780 130 - Wales 85 680 770 2 870 5 - Scotland 75 270 345 10 3 840 - Northern Ireland 45 295 340 15 35 255 Jersey and the Isle of Man 20 75 95 - - - Other undergraduate total 15 235 66 235 81 465 3 680 4 010 255 Other undergraduate %age of institution region London 74.2% 25.2% 99.4% 0.5% 0.1% 0.0% England (other regions) 7.6% 91.2% 98.8% 1.0% 0.2% 0.0% England region unknown 48.7% 48.2% 96.9% 3.1% 0.0% 0.0% England total 18.5% 80.3% 98.9% 1.0% 0.2% 0.0% Wales 2.4% 18.7% 21.1% 78.8% 0.1% 0.0% Scotland 1.8% 6.4% 8.2% 0.3% 91.5% 0.0% Northern Ireland 7.0% 45.7% 52.7% 2.5% 5.1% 39.7% Jersey and the Isle of Man 18.6% 77.3% 95.9% 2.1% 2.1% 0.0% Other undergraduate total 17.0% 74.1% 91.1% 4.1% 4.5% 0.3% Source: Higher Education Statistics Agency Limited, HESA 2013
13 Graduate mobility Figures 2 and 3 illustrate that 58% of UK-domiciled postgraduate and 48% of first-degree leavers who studied in Wales HEIs were employed in Wales. It is noted that whilst the Wales retention rate of graduates is lower than the other nation, it is higher than that observed among a majority of English regions, with only London and the North West retaining a higher proportion of undergraduates. In particular, Wales retention rate for First-degree leavers was 48%, three and a half years after graduation, which was higher than most English regions other than the North West (56%) and London (69%). The worst retaining region is actually the East Midlands with a retention rate of 33% (Figure 2). Postgraduates who studied at Welsh HEIs were less likely to remain in Wales for employment when compared to the other UK countries (83% for Scotland, 92% for Northern Ireland, and 96% for England). (Figure 3). Figure 2: %age of UK domiciled First-degree leavers from 2008/09 in employment within the UK regions Northern Ireland Scotland London North West Wales West Midlands East of England South East Yorkshire and The Humber North East South West East Midlands 56% 48% 46% 46% 45% 43% 43% 39% 33% 74% 69% 88% 0% 20% 40% 60% 80% 100% Figure 3: Proportion of UK domiciled postgraduate leavers 2008/09 in employment within the UK regions Northern Ireland Scotland North West London South East North East South West Wales Yorkshire & The Humber West Midlands East of England East Midlands 43% 71% 69% 62% 60% 58% 58% 54% 53% 51% 83% 92% 0% 20% 40% 60% 80% 100% Source: Higher Education Statistics Agency Limited, HESA 2013. Note: UK region in employment in November 2012.
14 Rees and Taylor (2006) examined the period 1995-96 to 2002-03, and found that in 2002-03, 40% of students chose to study outside Wales, but over the longer term there had been an increase in Welsh students studying in Wales. Rees and Taylor (2006) suggest two possible explanations for the increase in Welsh-domiciled students at Welsh HEIs that more students were choosing to live at home possibly to reduce costs, or that there were students entering HE who would not have done so previously and who for cultural, attitudinal or financial reasons preferred to live at home. They concluded that if only Welsh-domiciled students studied in Wales the HE sector would be much smaller. Those who leave Wales and those who enter Wales were both more likely to be from a managerial or professional family background. As more students came from outside than left, this made the HE sector in Wales more middle-class than it would have been otherwise. Rees and Taylor (2006) commented that working class students could be displaced from Welsh HEs if more middle class students stayed in Wales in response to fee and student support changes. Moreover, Welsh-domiciled students are found to be more likely to stay in Wales if there are HEIs in the local area, but nonetheless more likely to study outside Wales if from an urban area (Faggian et al, 2007). Wakeling and Jeffries (2013) found that the absolute numbers of entrants to institutions in England and Wales has remained stable during the period of 2000 to 2010, whereas any growth in enrolments has been accommodated in Wales. In this context, it is worth mentioning the Assembly Learning Grants scheme available in Wales, which was introduced to encourage people aged 19 or over and living in Wales to continue with their education. Students can receive payments of up to 1,500 if they are in full-time education or up to 750 if they are in part-time education. A recent study by Bruce (2012), however, suggests though that Assembly Learning Grants, in the period when they were available (2007 to 2010), did make a difference to mobility by increasing the proportion of Welsh students in Welsh HEIs, and that when these were abolished in 2010, there was a 2.6% increase in applications for study outside Wales. In terms of where students who leave Wales go to study, a large proportion go to post-92 institutions in England (Wakeling and Jeffries, 2013), and students have been found to be more likely to stay in Wales if they are entering a high RAE score university (Faggian et al, 2007). However, Fitz et al. (2005) argue that a substantial proportion of those who leave Wales do enter a prestigious institution and overall the higher their qualification quintile the more likely they are to apply to study in another country (Raffe and Croxford, 2013). It has also been found that students were more likely to leave Wales if they were studying medicine and more likely to stay than leave for other subject areas (Faggian et al, 2007). Using the DLHE Survey data, we find that nearly half of the Welsh domiciled graduates from 2008/09 working in Wales, three and a half years after graduation, had also studied in Welsh HEs. About 12% were returners, who had come back to Wales after studying elsewhere, and 24% of males and 21% of females had left Wales to study elsewhere and remained outside Wales to work. Females appear to be less mobile (Figure 4).
15 Figure 4: Typology of graduates mobility (% of those with Welsh connection) 60% 50% 40% 30% 20% Males Females 10% 0% Stayers Movers Returners Source: DLHE Survey 2008/09. Notes: Author s analysis. 6. Regional overview of graduate employment The DLHE Survey data also indicates that jobs are not spread equally around the country. There is a perception that all the jobs are in London, which is clearly not the case for the recently Welshdomiciled graduates. London has the largest share of non-welsh domiciled graduates, followed by the South East and North West. The highest is the proportion of graduates who have found employment outside the UK 8 (see Figure 5). 8 In this regard, there has been a steady increase in the number of UK students participating in Erasmus exchanges, in particular the number undertaking work placements. Statistics published in 2013 report the highest number of participants from the UK since the Programme was introduced in 1987 (Newman, 2013).
16 Figure 5: Employment of 2008/09 graduates by regions 25 20 15 10 5 0 Non-Welsh domiciled leavers 70 60 50 40 30 20 10 0 Welsh domiciled leavers Source: DLHE Survey 2008/09. Note: Non-Welsh domiciled leavers include EU and non-eu graduates; Author s analysis. 7. Labour market outcomes This sub-section considers the employment profile of Welsh and non-welsh graduates and compares trends with the rest of the UK. In particular, the analysis focuses on the: Economic activity of graduates in Wales, e.g. whether graduates are employed or unemployed, and the demographic factors that determine graduate employment; Types of jobs graduates enter, including whether graduates in Wales enter higher-level jobs; Occupational and industrial profile of graduate employment in Wales; Employment contract status of Welsh and non-welsh graduates, e.g. degree of self-employment, part-time working and temporary employment; Earnings of graduates in Wales and the extent to which different graduate groups attain a return on their education; Figure 6 illustrates the trends in the main activities of HEIs leavers, collected in the past four Longitudinal Surveys, sourced from the 2013 HESA data. The %age of leavers working (either fulltime paid work including self-employed, part-time paid work, voluntary work or unpaid work) at the survey date has increased slightly from 80.5% for 2002/03 leavers to 81.9% for 2008/09. The 2008/09 %age was still not as high as the 2004/05 %age of 83%%. The proportion of leavers assumed to be unemployed has decreased from 3.5% in 2006/07 to 3.2% in 2008/09. The %age of leavers engaged in further study has gradually increased throughout the years, whilst the proportion of those who work and study decreased.
17 Figure 6: Destinations of UK domiciled leavers by all levels of qualification obtained and activity 2002/03, 2004/05, 2006/07 and 2008/09 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 83.0% 81.9% 80.5% 8.8% 6.7% 5.2% 4.9% 5.5% 6.7% 2.3% 2.6% 3.2% Work Work & further study Further study Unemployed 2002/03 2004/05 2006/07 2008/09 Source: Higher Education Statistics Agency Limited, HESA 2013 Table 6 provides a more complete split of leavers main activity and compares the responses of Welsh-domiciled and non-welsh leavers. There appears to be relatively little difference in the overall activity status of Welsh and non-welsh graduates. The data also presents a positive picture for graduates employment. Around 74% of male Welsh graduates were in full-time employment as compared with 75% of the non-welsh graduate males. Welsh female graduates reported the highest %age working part-time (13%). Females unemployment rate in Wales and outside of Wales were lower than for males. Those in Wales in further study were similar to those outside of Wales.
18 Table 6: Activity profile of Welsh and Non-Welsh domiciled graduate leavers 2008/09 Welsh students Non-Welsh Males Females Males Females Full-time paid work 74.0 67.3 75.1 70.1 Part-time paid work 6.3 13.0 5.2 9.8 Voluntary/unpaid work only 0.4 0.5 0.6 0.6 Work and further study 3.9 6.0 4.6 5.6 Further study only 7.1 6.8 7.5 6.9 Unemployed 4.2 2.4 4.2 2.8 Not available for employment 2.2 2.4 1.6 2.2 Other 1.9 1.6 1.2 2.1 Total 100.0 100.0 100.0 100.0 Source: DLHE Survey 2008/09. Table 7 shows wide variability in full-time employment rate across the local authorities in South West and Central Wales. However, given the small sample sizes, the descriptive should be interpreted with caution. For males the highest employment rate is found in Carmarthenshire (89.8%) with both Swansea and Neath Port Talbot at over 80%, and with lower employment rates found in the rural authorities of Powys, Ceredigion and Pembrokeshire. Ceredigion has the lowest employment rate for males (65.6%), but the highest rate for females (83.2%). The data also indicates that there were strong variations in the rate of part-time working female graduates. Women employed in Neath Port Talbot and Ceredigion were less likely to be working part-time than those from the rest of the areas being examined. The highest is the proportion of part-time graduate females employed in Powys (23.9%). Table 7: Activity profile of graduate leavers 2008/09 employed in South West and Central Wales Powys Ceredigion Pembrokeshire Carmarthenshire Swansea Neath Port Talbot Males Females Males Females Males Females Males Females Males Females Males Females Full-time paid work 76.3 56.1 65.5 83.2 75.4 81.2 89.8 67.1 82.0 79.5 83.0 81.9 Part-time paid work 19.9 23.9 10.9 8.4 17.0 18.8 8.1 24.2 5.3 13.6 8.8 10.1 Unpaid work only - 3.8 23.6 8.5 - - - - 1.1 1.1 2.3 - Work & further study 3.8 16.3 - - 7.6-2.1 6.2 11.7 5.9 5.9 8.0 Other - - - - - - - 2.5 - - - - Sample size 25 40 24 33 26 49 45 61 82 130 32 39 Source: DLHE Survey 2008/09. Notes: Author s analysis. 7.1. Graduate employment contracts and employer size To understand graduate experience of work more fully, the next table considers the stability of graduate jobs in terms of their employment contract. About 74% of Welsh domiciled students in employment are reporting they were on a permanent or open ended contract, and only 13% of males and 11% of females were on a one-year fixed term contract. The levels of self-employment were marginally lower among Welsh graduate males than among non- Welsh graduates.
19 Table 8: Employment basis of Welsh and Non-Welsh graduate leavers, 2012 Welsh students Non-Welsh Males Females Males Females On a permanent or open-ended contract 73.5 74.8 75.9 76.2 On a fixed-term contract lasting 12 months 13.0 11.4 9.5 11.0 On a fixed-term contract lasting less than 1 year 4.5 4.8 4.0 4.2 Self-employed/freelance 4.1 3.0 5.5 3.8 Temporarily, through an agency 1.4 1.8 1.4 1.6 Temporarily, other than through an agency 0.6 2.3 0.8 1.1 Employed on another basis 1.9 1.6 1.4 1.4 Setting up own managing your own business 1.0 0.4 1.5 0.8 Source: DLHE Survey 2008/09. Notes: Author s analysis. With the growth in graduate labour supply, one of the noticeable trends has been the extent to which small and medium organisations have increasingly recruited graduates. Figure 7 shows a broad overview of the size distribution of the organisations in which the Welsh domiciled students are employed. The figure compares the Welsh domiciled graduates employed in Wales and England. Figure 7: Welsh graduates employed in Wales and England by employer size band, 2012 Employed in Wales Employed in England 24% 19% 1 to 49 50 to 249 250 or more 1 to 49 50 to 249 250 or more 61% 16% 61% 20% Source: DLHE Survey 2008/09. Notes: Author s analysis. Nearly two-thirds of graduates in 2012 were employed in large organisations, 24% of those employed in Wales were in small organisations employing less than 50 employees, and 16% were employed in medium organisations 1. Slightly lower is the proportion of young graduates within small organisations employed in England. 9 This compares with an overall graduates employment of 22% in a small employment size and 18% employed in medium organisations.
20 7.2. Graduate jobs The occupations in which graduates work have been categorized according to standard occupational classification and shown in Table 9. In Figure 6 we define as high-level occupations those employed in managerial and senior officials, professional occupations and associateprofessional and technical occupations. All other groups (e.g. from skilled trade to elementary occupations) have been classified here as representing other occupations. Although a similar proportion of graduates in Wales and the rest of the UK were working in high-level occupations, there were some differences between Welsh and non-welsh domiciled graduates. Welsh domiciled students working in Wales were more likely to be employed in managerial occupations (7%) as compared to non-welsh graduates (4.4%), and less likely to be employed in professional occupations (47.7%) than their non-welsh counterparts (59.9%). In 2012, the majority of graduates were employed in high-level jobs. Professionals accounted for the highest proportion of graduate employment, followed by associate-professional and technical occupations and other occupations (Figure 8). Table 9: Occupational distribution of employed Welsh and Non-Welsh graduates, 2012. %ages The rest of the UK Welsh student Non- Welsh Employed in Wales Welsh student Non- Welsh Managers, directors and senior official 5.0 6.6 7.0 4.3 Professional occupations 56.9 51.2 47.4 59.9 Associate professional & technical occupations 26.1 24.2 22.4 18.4 Administrative and secretarial occupations 4.5 7.6 8.3 7.5 Skilled trades occupations 0.6 1.2 1.7 1.3 Caring, leisure & other service occupations 2.5 3.8 5.4 5.1 Sales & customer service occupations 3.0 3.6 5.1 3.1 Process, plant and machine operatives 0.1 0.4 0.2 - Elementary occupations 1.4 1.4 2.5 0.4 Source: DLHE Survey 2008/09. Notes: Author s analysis.
Employed in Wales Employed outside Wales Employed outside Wales Employed in Wales 21 Figure 8: Occupational profile of employed Welsh and non-welsh domiciled graduates, 2012 Non-Welsh Welsh student Non-Welsh Welsh student 0 10 20 30 40 50 60 70 Other Associate professionals Professionals Managers Source: DLHE Survey 2008/09. Notes: Author s analysis. Possessing a higher degree increases individuals opportunities to working in higher-level occupations. Figure 8 shows that those with postgraduate level degree were more likely to be employed in higher-level jobs than those who only have first degrees. Overall, 91% of Welshdomiciled postgraduate leavers working in Wales were employed in higher-level jobs, compared to 72% of those who have first-degree or other undergraduate qualifications. Figure 9: Occupational profile of Welsh-domiciled graduates by highest qualification obtained, 2012 First-degree & other Postgraduate First degree & other Postgraduate 0 10 20 30 40 50 60 70 80 Others Associate professionals Professionals Managers Source: DLHE Survey 2008/09. Notes: Author s analysis.
22 Table 10 examines the employment profile by age for graduates employed in Wales. Accordingly, the youngest graduates, those aged 18 to 20, were the least likely to work in professional occupations. Furthermore, within the highest-level occupations, graduates aged 21 to 24 were more likely to be working as associate professionals, and less likely to be in managerial occupations than their older counterparts (those aged 30 years and over). Table 10: Occupational profile of graduates employed in Wales by age (%), 2012 %age Age 18-20 Age 21-24 Age 25-29 Age 30 and over Managers, directors and senior official 7.9 5.2 4.9 9.0 Professional occupations 20.9 45.1 61.5 56.5 Associate professional & technical occupations 19.3 24.7 17.3 18.6 Administrative and secretarial occupations 14.1 9.6 5.6 6.0 Skilled trades occupations 1.7 2.2 0.7 1.1 Caring, leisure & other service occupations 13.8 4.3 5.3 6.0 Sales & customer service occupations 15.1 6.0 3.6 1.8 Process, plant and machine operatives 1.0 0.1 0.2 0.2 Elementary occupations 6.3 2.8 0.9 0.8 Source: DLHE Survey 2008/09. Notes: Author s analysis. Finally, female graduates were more likely to work in professional occupations or other occupations than their male counterparts, while male graduates were relatively more likely to work in managerial and associate professional occupations (Figure 10). Among both males and females, the most common occupational group for graduates employed in Wales was professional occupations. Figure 10: Occupational profile of graduates employed in Wales by gender (%), 2012 60 50 40 45.2 52.8 30 20 24.5 23.5 19.8 21.2 10 6.8 6.2 0 Managers Professionals Associate professionals Others Males Females Source: DLHE Survey 2008/09. Notes: Author s analysis. Table 11 provides the occupational distribution of graduates employed in South West and Central Wales. Young graduates in Swansea and Ceredigion were more likely to be employed
23 in professional occupations. Relatively higher is the %age of graduate males in managerial positions in Carmarthenshire and Pembrokeshire. Table 11: Occupational profile of graduates employed in South West and Central Wales (%), 2012 Powys Ceredigion Pembrokeshire Carmarthenshire Swansea Neath Port Talbot M F M F M F M F M F M F Managers, directors & senior official 10.1 10.1 6.0 14.0 15.6 4.8 22.7 2.9 2.0 7.0 5.1 6.2 Professional occupations 26.4 37.5 42.0 51.8 22.4 65.3 43.1 42.1 49.2 51.4 29.7 50.8 Associate professional & technical 28.6 21.8 8.7 12.6 35.5 13.0 20.9 28.5 20.6 13.9 23.7 28.2 Administrative and secretarial 16.1 21.1 9.7 15.0 5.2 1.7 4.4 11.0 9.1 11.2 26.2 2.4 Skilled trades occupations - - - - 11.2 - - - 3.0-2.8 - Caring, leisure & other service 5.9 5.7 22.6-3.4 6.6-7.1 7.7 7.5-9.7 Sales & customer service occupations - - 6.4 6.5-8.7 4.1 2.8 4.3 7.6 4.9 2.7 Process, plant,machine operatives - - - - 3.2-2.2 - - - - - Elementary occupations 13.0 3.8 4.6-3.5-2.7 5.7 4.2 1.4 7.7 - Source: DLHE Survey 2008/09. Notes: Author s analysis 7.3. Industrial sector Another important factor in understanding the nature of graduate jobs is the industrial distribution of employment. In 2012, the industries employing the highest proportion of graduates in Wales were education (27% for Welsh-domiciled student, and 22% for non- Welsh graduates), followed by human health and social work activities (23% and 24%, respectively). Table 12: Industrial profile of graduates employed in Wales (%), 2012 %ages Welsh student Non- Welsh Agriculture, forestry and fishing 0.5 1.3 Mining and quarrying 0.1 0.2 Manufacturing 4.4 11.5 Electricity, gas supply 1.0 0.3 Water supply, sewerage 0.3 0.5 Construction 1.6 3.0 Wholesale and retail trade 7.4 5.1 Transport and storage 0.7 0.8 Accommodation and food service activity 2.0 0.5 Information and communication 2.8 3.4 Financial and insurance activities 3.2 3.1 Real estate activities 1.3 - Professional, scientific and technical 8.0 12.8 Administrative and support service activity 1.8 2.3 Public administration and defence 10.2 5.5 Education 27.0 21.7 Human health and social work activities 22.8 24.0 Arts, entertainment and recreation 3.0 2.2 Other service activities 2.1 - Source: DLHE Survey 2008/09. Notes: Author s analysis