Mapping Graduate Mobility

The UK evidence

In June 2013, the Foresight Future of Cities project was launched in the UK, as a key effort to develop an evidence base on the future of UK cities to inform decision-makers. During the last few years, I have closely followed the outputs of the project and enjoyed reading their analysis and reports.

Recently, the project’s 3 final outputs were released, one of which examines the role of graduate mobility in driving productivity of cities. An important part of the analysis is to understand the current patterns of graduate mobility, especially how each city (or each region) fares against its counterparts.

There are 4 categories of graduate mobility, as defined in the report: Incomers (neither lived or studied in the area previously), Returners (left the area to study and returned for work), Stayers (studied and stayed to work), and Loyals (lived, studied and stayed to work within the region).

Using the data from the Higher Education Statistics Agency (HESA) on the destination of leavers from higher education, the report shows the workplace destinations of graduates from all higher education providers in England, Scotland and Wales.

Creative maps in the report creatively show proportional flows analysis of graduates from the 2013/2014 cohort to the seven cities selected by the project: Birmingham, Bristol, Cardiff, Leeds, Liverpool, London and Manchester. See these maps below.

 

Not surprisingly, London attracts graduates all over the UK. For instance, over 40% of graduates from Cambridge and Oxford choose to work in London. While Cambridge and Oxford may not be that far from London, the University of St Andrews, which is located in Scotland, is rather distant from the capital in the UK context. However, around one third of graduates from this Scottish university also relocated themselves in London for jobs. The other two large cities – Birmingham and Manchester are also able to attract some graduates from universities far away.

In contrast, smaller cities such as Cardiff are less successful in this regard. Cardiff itself has 3 universities: Cardiff University, Cardiff Metropolitan University and the University of South Wales. Even for these 3 universities, less than 30% of graduates choose to remain in Cardiff for work, while the rest 70% leave the Welsh capital. It might be true that graduate attraction is an important factor to look at, but for Cardiff, and other cities similar, an even more urgent issue is graduate retention.

In the last two decades, London has been enjoying comparatively high productivity and growth, while Wales (of which Cardiff the capital and the largest city) has been lagging behind the UK average in those indicators. There are strong positive correlations between the share of skilled workers in a city and the productivity growth of that city.

What about Ireland?

In the previous blog, I briefly mentioned the HEA report – What do Graduates Do? The Class of 2013. It offers insights into the first destination of graduates in Ireland, nine months after graduation. The 4th section of the report is about the regional distribution of employed graduates. However, regional of employment data was not available for Trinity College Dublin, this section presents information for only 6 Irish universities.

According to the report, “Dublin is the region with the most employment opportunities for graduates across all levels of qualification with 34% of Honours Bachelor Degree, 32% of Higher Diploma, 27% Graduate Diploma, 43% Taught Masters, 37% Research Masters and 32% of Doctorates employed in this region.” The following figures show the picture of Irish graduates.

Honours Bachelor Degree GraduatesHigher and Postgraduate Diploma GraduatesTaught Masters, Research Masters and Doctorate Graduates

In comparison to the HESA data, the HEA data do not allow us to carry out institutional level analysis, i.e. it is not possible for us to access the raw data of these surveys and understand graduate mobility between regions or cities. To be specific, we still don’t know, how many of those graduates now working in Dublin are from Dublin-based universities or from universities located outside the capital city. Further accessible data from the HEA, or other government organisations that hold relevant data, should be welcomed.

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Do we have an over-supply of graduates in Ireland? (Part 2/2)

In line with what is shown in Foley and Brinkley (2015), in this blog I search for empirical evidence in an attempt to answer the question of over-supply of graduates in Ireland. As stated in the previous blog, there would be a couple of likely consequences if there exists an over-supply of graduates. These consequences, or scenarios, are examined in much detail one by one as follows.

1. An increase in rates of graduate unemployment

Data on graduate unemployment rate is not readily available in the case of Ireland, as far as I am aware. The ONS in the UK has been releasing ‘Graduates in the UK Labour Market’ reports for a long period which enable the analysis of graduate employability. Instead, I compare unemployment rates of the labour force by level of education in Ireland between 2002 and 2012. As there seem slight changes in the way third level degrees are identified in early 2009, I present the results in two periods respectively. Nonetheless, the changes are small, and the overall trend remains.

Unemployment Rate 2002Q4 to 2009Q1
Figure 1
Unemployment Rate 2009Q2 to 2012Q2
Figure 2

It is obvious from these two figures that unemployment rates of persons with third level education are consistently lower than those of persons without. This finding is in line with international evidence.

Since 2008 there have been increases of unemployment rates across all groups, which is not surprising due to the challenging economic conditions. Even though unemployment rates of persons with third level education increased after the economic crisis, it does not suffice to argue it is resulted by an over-supply of graduates. As Foley and Brinkley (2015) similarly argued that the situation could be ‘in fact more a function of wider labour market conditions’.

As Figure 2 clearly shows, while unemployment rates of persons with third level education more or less stabilised since 2009 although they did not decline significantly either (which was the case in the UK). However, it could be claimed that unemployment rates of persons without third level education continued to worsen after the economic crisis, suggesting that graduates were still in a relatively better place than the others in the workforce.

2. A decrease in the graduate wage premium

Generally, the graduate wage premium refers to the average increase in earnings graduates can expect when compared to their non-graduate counterparts. Foley and Brinkley (2015) suggested that, ‘Oversupply of graduates would lead to a reduction in this figure, as graduates were forced down the rungs of the labour market.’

Relative earnings of tertiary-education workers 2013
Figure 3

As Figure 3 shows, relative earnings of tertiary-educated workers across the OECD countries are impressive, with Ireland ranked amongst the countries with the highest graduate wage premium. In Ireland, persons with tertiary education earned nearly 1.8 times of what earned by persons without university degrees.

More relevantly, we would like to know how this figure changes across years. In the following table, I use the OECD data to compare the trends in relative earning of tertiary-educated workers in Ireland with those in the OECD countries and the EU-21 countries between 2005 and 2013.

Table 1: Trends in relative earnings of tertiary-education workers (2005, 2010-2013)

2005 2010 2011 2012 2013
Ireland 177 175 176 182 190
OECD 154 155 159 156 156
EU-21 160 159 156 159 157

Note: 25-64 year-olds with income from employment; upper secondary education and post-secondary non-tertiary = 100.

In the EU-21 countries, relative earnings decreased slightly during the period, while thost in the OECD countries only increased by a margin. By contrast, the figure in Ireland increased significantly, with relative earnings of graduates increasing from 177 in 2005 to 190 in 2013. This clearly indicates that graduate wage premium has become more prominent in the Irish context, which is against the suggestion that there is an over-supply of graduates in Ireland.

3. What about graduate emigration?

For the analysis of Ireland, emigration is a factor that cannot be overlooked. On the national level, around 480,000 people left Ireland between April 2008 and April 2014, while a total of 338,000 came to Ireland as immigrants over the same period, suggesting that there are 141,000 net migrants who left the country in the six-year period.

It is not hard to assume that graduates in Ireland are probably more likely than the others to emigrate, given that tertiary-educated workers are in general more mobile than those without university degrees.

In 2013, the Higher Education Authority (HEA) released a publication on the destination of graduates, which shows that, “Of those graduates in employment those gaining employment overseas doubled over the last five years from 5% of the 2008 graduates to 10% of the 2012 graduates reflecting the continued need for graduates to pursue opportunities overseas, a trend that is likely due to the current economic climate in Ireland.”

Surely, the figures shown in the 1st and 2nd parts will change if these graduates would have remained in the Irish labour market, but an accurate estimation is impossible to get. In 2011/12, there were a total of 60,000 graduates from all subjects in all HEA-funded HEIs. Of these 60,000 graduates, just under 50% of them were in employment after graduation (as the rest chose to pursue further studies), which gives us 30,000 graduates in the workforce. If 10% of them emigrated from Ireland, the number would be 3,000.

Therefore, a simple question would be, if these 3,000 graduates have stayed in Ireland to seek employment, how would the whole picture change? To answer this question, we definitely need a lot more data, such as the demand from industries and the employability of graduates, which are currently missing.

Although I agree that it is likely the unemployment rates of graduates could rise up if there are more graduates entering the labour market than it is (if we think the demand of industry is stable at a certain point of time), the majority of existing data tend to argue that there is not an over-supply of graduates in Ireland.

Do we have an over-supply of graduates in Ireland? (Part 1/2)

The debate on if there is an over-supply of graduates in Ireland has been ongoing for some time. I remember myself attending an event last year, in which a number of speakers addressed this issue, analysing from different perspectives and coming to different conclusions. If we consider the complexity of the issue, e.g. the number of factors at play and the limitations of research approaches used, the disagreement is not surprising.

On 7th June, 2015, the Irish Times published an article on the aforementioned disagreement (http://www.irishtimes.com/life-and-style/people/overqualified-workers-who-know-too-much-1.2237279).

On the one hand, the article¬†referenced the results of studies by ESRI researchers which show that “Ireland emerged as having the highest rate of ‘overeducation’ in Europe”, with one of the authors suggesting part of the reason is that, “It could be there are too many graduates”.

On the other hand, the article cited Tom Boland, the chief executive of the HEA, who said: “Once you talk about overeducation then you are into how many are you going to educate, and then you are into a quota. And if you are going to come up with a ceiling on numbers then you might exclude someone who is going to come up with the cure for cancer; you just don’t know.”

Put simply, I think these two arguments are made from different points of view, both have some supportive evidence, but, it seems to me, one cannot be used to reject the other.

The concept of overeducation adopted by ESRI researchers is usually tested through questionnaires sent to either employees or employers, who then indicate if a specific job requires graduate knowledge or skills and if the person who is doing this job has a graduate education or not. When a graduate takes up a job which is considered, either by this graduate himself or her/his employer, not to require graduate knowledge or skills, it is concluded that this graduate is overeducated, as he ends up with a ‘non-graduate’ job. Nonetheless, the reason put forward by Tom Boland is not from this approach but based on the “who should or who should not attend higher education” debate. It is a hard question to answer, definitely if one wants to have a concrete numeric answer.

A recently published work by the Work Foundation in the UK – titled “Unemployed and overqualified? Graduates in the UK labour market” – provides some insightful evidence on this debate in the context of the UK.

In particular, the authors provided the following thinking: “If the overall supply of graduates was indeed outstripping aggregate demand, there would be several likely consequences. The first would be an increase in rates of graduate unemployment, especially amongst the more recent cohorts entering the labour market. The second would be some displacement of less skilled employees, as graduates struggling to enter the labour market were prepared to look for work outside of ‘graduate’ roles. This, in turn, would lead to a reduction in the additional ‘wage premium’ that graduates can expect to earn over the course of their working lives.”

The authors then continued to assess the evidence to assess the merits of the claim over the course of two decades between 1992 and 2011. In short, the response to the question that if there is an over-supply problem in the UK was no. The rise in graduate unemployment in most OECD economies, the UK included, is almost to do with cyclical factors and has very little if anything to do with an over-supply of highly qualified labour. Also, while supply has continued to expand at a rapid rate in the UK, it has not resulted in a significant change in relative wages: the graduate premium is significant in all OECD economies and has not declined over the last decade.

Although the authors cautiously pointed that this does not necessarily mean that the higher education sector functions fully effectively, there is no evidence to suggest the existence of an over-supply of graduates in the UK.

Then, for us, the question is, what is the evidence in Ireland? Whether or not the situation here is different from its UK counterpart on this issue? In the next blog, I will present more details of data analysis.

(To be continued.)