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Recent graduates facing difficult challenges in jobs market amid COVID-19 discovers MDX-backed study

ONS figures reveal however graduates are faring better than people without a degree

Recent graduates are facing tough challenges in the labour market amid the COVID-19 pandemic, according to new Office for National Statistic (ONS) figures.

But overall graduates are more likely to be in employment than people without a degree, according to the study co-authored by Dr Michela Vecchi, an Associate Professor of Economics at Middlesex University.

The ONS report revealed:

  • an unemployment rate of 12.0% for those who recently graduated (in the last five years) in the third quarter of 2020 (between July and September) compared with a national average of 5.1% during the same period. The figure for recent graduates remains below the youth unemployment rate (for those aged 16 to 24) which stood at 13.6% in the third quarter of 2020.
  • Overall graduates are faring better than people without a degree. Between July and September 2020, people aged between 25 to 64 without a degree accounted for 37% of the unemployment rate, following by 31% for those aged 16 to 24 without a degree. In the same period 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. The average unemployment rate for graduates between 2017 up until September 2020 was 3.0%, compared with the total average unemployment rate of 4.2%.
  • 70% of graduates are employed in the top three occupations: managers and directors, associate professional and technical occupations, and professional occupations.
  • ‘Graduate skills mismatch’, defined as the proportion of graduates employed in non-graduate positions, decreased by 5% points to 25.5% between the third quarter of 2019 and third quarter of 2020. This may be linked to the lockdown's impact on the hospitality and retail sector.

Commenting on the findings, Dr Vecchi, said: “Recent graduates have been particularly affected by the lockdown and it is a concern for those completing their studies. They are facing more difficult labour market conditions than they were a few years ago as the economy has slowed and many sectors are shut down.

“Some of the jobs that have seen increased demand during the pandemic revolve around digital technology. These are typically higher skilled jobs which require a degree and are suitable for home working, which helps to explain why graduates have fared better compared to non-graduates.

“Certainly, the situation is tough at the moment for people just finishing a degree but prices for holidays are already increasing as more people get vaccinated and hopefully at the end of this lockdown there will be a rapid revival of the economic situation and that is good news for everybody including graduates and non-graduates.”

Dr Vecchi and Dr Catherine Robinson, Deputy Dean and Senior Lecturer in Applied Economics and Business Statistics at Kent Business School, have been awarded a £53,650 grant by UK Research and Innovation to investigate the impact of COVID-19 on the labour market with a particular focus on ‘graduate skills mismatch’.

Dr Vecchi said: “While it could be seen as a positive that fewer graduates are employed in non-graduate positions, this reduction could also mean fewer graduates are employed in any jobs.

“Graduates are among the highest skilled in the labour force and are crucial to future recovery, so it is vital we understand how their opportunities have been impacted by the coronavirus pandemic.”

The ONS study – Graduates’ labour market outcomes during the coronavirus (COVID-19) pandemic - was written in collaboration with Marina Romiti and Vicky Haigney from ONS, Dr Vecchi and Dr Robinson.

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