The Changing Graduate Labour Market

Question: Discuss about the UK Labor Market for Graduates? Answer: Terms of Reference The report mainly incorporates the labor market conditions of the English Domiciled graduates and the post graduates and the data that has been included in the report is mainly collected from the Labor Force Survey. The report has also facilitated in conducting an in depth analysis on the labor market indicators over time. The graduates in the present report are referred to as those individuals whose highest qualification is an undergraduate degree at the Bachelors level. Again while analyzing the market condition, it is an important aspect to take into consideration that changes that take place in a quarterly basis are highly reactive to the seasonal variation whereas the changes that take place on a yearly basis emphasize upon providing a clear indication of the overall trend in the labor market of UK. The report while incorporating the study regarding the labor market conditions emphasizes upon coming up with simple outcome measures on the basis of the survey data and it does not control for the differences that tend to exist in the characteristics of the non-graduates and the graduates. So this reveals the fact that the outcomes that have been presented in the report cannot be attributed to the fact that a particular qualification is possessed by an individual but it also takes into consideration various other factors that included the skills, ability, intelligence and experience of the individuals. Methodology The data has been collected from various sources that include the survey data and also collects the facts and information from various published sources like online reports i.e. Graduate Labor Market Statistics which is quarterly publication on the labor market conditions for graduates in UK. The collected facts and data have been analyzed with the help of the secondary quantitative analysis technique. Findings It has been observed that the graduates and the post graduates have been observed to be experiencing a higher rate of employment and are observed that they are mostly employed in high skill jobs. There has been a marginal increase of 87.5% in employment in the working age population of both the graduates and the postgraduates in the last quarter (Wilton, 2011). Moreover it has also been observed that the employment rate for the young graduates is a bit on the lower side in comparison to all graduates even though the gap that exited in the high skilled employment rates has been observed to be around 10 percentage points. The rate of unemployment among the young graduates has been observed to be reducing on a yearly basis of around 1.0 percentage points to 3.9% and thus it can be looked upon as a lowest unemployment rate in the first quarter for the young graduates since in the first quarter if the year 2007, it was recorded to around 3.5% (Gov.uk, 2015). Thus the economic activity on the basis of the qualification and age group of the graduates for the first quarter in the year 2015 can be illustrated with the help of the following graph: [Source: Gov.uk, 2015] Emphasizing upon the annual earnings, it has been observed that the working graduates have experienced a decrease of 500 in their median salary and thus amounted to around 31,000 but then also it can be said that they tend to earn a significant premium in comparison to the non-graduates. On the other hand in case of the post graduates, it has been observed that the earning of the postgraduates has increased by 1000 and thus has amounted to around 39,000. Again taking into consideration the young population, it has been observed that they also tend to experience a similar trend in their earnings in comparison to the working age population. The earning premium between the young graduates and the young post graduates has been observed to be widening to around 4000 in the first quarter of the year 2015 which was around mere 2000 in the previous year (Mar and Liang, 2012). Thus the Median gross annual earnings on the basis of the qualification level and age for the first quarter of the year 2015 can be illustrate with the help of the following graph: [Source: Mar and Liang, 2012] In addition t the above facts, the analysis of the historic trends in the rate of employment and median salaries, it can be said that the graduate labor market has experienced a lot of change over the years and there has also been a significant impact of recession on the labor market. However it is also the fact that the working age population of both the graduate and the non-graduate, the rate of employment has almost returned to its previous levels. Whereas on the other hand the pace of recovery in the employment rate of the postgraduates are recovering at a slower pace. On the other hand it is also observed that the young population tends to experience greater fluctuations in the rate of employment and this is mainly because of the fact that the young individuals are not likely to possess an established long term careers which tend to make the rate of employment depend upon the labor market shocks and seasonal variations (McGuinness and Sloane, 2011). The rate of employment on the basis of the qualification and age group between the years 2006 to 2015 can be illustrated with the help of the following graph: [Source: McGuinness and Sloane, 2011] Thus analyzing the overall scenario, it can be said that the graduates enjoy a significant premium in their earnings over the non-graduates but again in the recent times it has been observed that the gap in the level of earnings between the graduates and the non-graduates working population has narrowed to a large extent. The level of earnings on the part of the graduates has decreased from 55% to 45% between the years 2015 to 2016 but even though there has been significant decrease, the level of earning of the graduates is higher than the level of earnings of the non-graduates (Millard, 2008). Thus the median salaries and the earnings differentials between the years 2006 to 2015 can be illustrated with the help of the following graph: [Source: Green and Henseke, 2014] Conclusion Thus the analysis reveals the following facts: The rate of employment for working graduates in the recent years is observed to be 87.5% and this is highest level observed after the level of 88.3% that was recorded in the year 2007. The rate of unemployment on the part of the young graduates is around 3.9% which is the lowest since the year 2007. References Green, F. and Henseke, G. (2014) The Changing Graduate Labour Market: Analysis Using a New Indicator of Graduate Jobs, published by the Centre for Learning and Life Chances in Knowledge Economies and Societies at: https://www.llakes.org Elias, P. and Purcell, K (2013) 'Classifying graduate occupations for the knowledge society' Futuretrack. Working Paper (5), 1-37 Gottschalk, P. and Hansen, M. (2003) 'Is the proportion of college workers in noncollege jobs increasing?', Journal of Labor Economics, 21(2): 449-471 Gov.uk, (2015). Welcome to GOV.UK: Graduate Labour Market Statistics. [online] Available at: https://www.gov.uk/ [Accessed 13 Feb. 2016]. Mar, D. and Liang, Y. (2012). Labour Market Outcomes for Young Graduates Part A: Main Report. SSRN Electronic Journal. McGuinness, S. and Sloane, P. (2011). Labour market mismatch among UK graduates: An analysis using REFLEX data. Economics of Education Review, 30(1), pp.130-145. Millard, S. (2008). The Great Recession and the UK Labour Market. SSRN Electronic Journal. Wilton, N. (2011). Do employability skills really matter in the UK graduate labour market? The case of business and management graduates. Work, Employment Society, 25(1), pp.85-100.