Education: Numbers go up and jobs go down

Getting more of our young people to share in higher education is a goal shared by parents, teachers and the Government. But will there be jobs for them when they graduate?

A record-breaking number of students will begin undergraduate courses this autumn, according to the latest figures from the University and Colleges Admissions Service (UCAS). This will ensure that more new graduates than ever flood into the employment market in 2001. There is compelling evidence, however, that there will not be enough jobs for all of them.

The Government has committed universities and colleges to producing more graduates. In July, it announced that an extra 80,000 places for higher education would be created over the next three years, as a result of the Comprehensive Spending Review. With more than 120,000 unsuccessful applicants to colleges and universities through UCAS each year, this expansion of higher education looks like a sensible response to the tremendous demand from potential entrants.

But the Dearing Committee warned last year, that any future changes in student numbers should also take into account whether or not employers needed more highly qualified candidates. Ominously, the most up-to-date labour market figures suggest that Britain is already suffering from a graduate glut.

This summer, more than 250,000 students received first degrees from UK universities and colleges. Most of these new graduates will be rewarded for their three or four years of hard work through above average salaries and continuous employment throughout their careers.

But competition for jobs will be fierce. In July, the Association of Graduate Recruiters (AGR), representing more than 550 of the UK's leading employers, reported that its members were receiving 60 applications, on average, for each vacancy. Consequently, many of the class of '98 will have to lower their expectations and will find themselves under-employed, in jobs for which they are over-qualified.

This, however, is just the tip of the iceberg. Statisticians at the Department for Education and Employment (DfEE) presented evidence to the Dearing Committee that the growth in graduate jobs has lagged well behind the expansion in student numbers during the last decade.

Using labour market projections produced by the University of Warwick's Institute for Employment Research, the DfEE calculated that a surplus of 337,000 graduates will be generated in the 10 years to 2001. Longer term forecasts suggest that the pool of redundant graduates will grow until 2016. These figures were prepared even before the 80,000 new places were announced.

It might be reasonable to think that employers would be happy to have so many graduates clamouring for jobs. Yet 38 per cent of AGR firms are expecting recruitment shortages this year, mainly for posts in computing, electronic engineering, and other scientific and engineering disciplines.

The AGR points out that there are plenty of applicants, but a shortage of graduates who are "technically competent and commercially aware". Employers are now becoming dependent on sophisticated selection methods to reduce the flood of inappropriate applications from those unable to offer the necessary skills.

Recruitment shortages, despite an overall graduate glut, have arisen partly because much of the recent expansion in student numbers has been driven by the preferences of applicants, who have not necessarily chosen to study subjects which are in demand from employers. Although there has been a large rise in applications for computer science courses compared to last year, disciplines such as chemistry, physics and electronic engineering have all recorded marked falls.

If this trend is maintained, then the extra 35,000 students, who will begin at English universities and colleges in 1999-2000, are unlikely to bring much relief to employers. Instead, they are likely to join the 34,000 graduates who each year are unable to find jobs which match their qualifications.

Even if all of the new higher education entrants are at sub-degree level, the situation will not be any better. According to the Higher Education Statistics Agency, more than 40 per cent of students who complete sub- degree courses at higher education institutions immediately embark upon first degrees. With so many students regarding these courses as stepping stones towards a degree, the glut would be extended, not prevented. There is no extra demand for holders of sub-degree qualifications in the labour market either. The Institute of Employment Research estimates that 97,000 will have been unable to find appropriate employment between 1996 and 2001.

The graduate glut also has some serious consequences for taxpayers. During the Nineties, government and taxpayers have enjoyed a social "rate of return" of 7 to 9 per cent from higher education study, because the greater productivity of graduates brought extra tax income to the government, and more than compensated for the cost of educating them. As the Treasury requires a minimum 6 per cent rate of return, higher education has represented a good public investment.

These calculations, however, were based on graduate productivity levels during the early Nineties. The DfEE has worked out that if the excess graduates end up in employment which does not fully utilise their extra skills, then the social rate of return will fall below 6 per cent.

The overall number of UK applicants to UCAS in 1998 is down compared to last year. This drop is even more serious when one considers estimates from the Government Actuary's Department, that the UK population of 18 and 19-year-olds has increased by 6.3 per cent since last year. Even a small percentage rise in the number of applicants aged under 21 would mean that proportionately fewer young people applied for higher education in 1998.

Potential applicants may be beginning to have doubts about higher education as an investment. In the early Nineties, the private rate of return to a student was 11 to 14 per cent, because the cost of attending university, and forgoing earnings for three or four years, was outweighed by graduates' higher salaries.

But the DfEE forecasts that the glut could reduce the graduate pay premium by as much as 50 per cent. With the added cost of tuition fees, and the phasing out of maintenance grants, the potential private rate of return for students starting courses this autumn will be smaller than for any previous generation.

At present, there are more than 6.6 million holders of higher education qualifications of working age in the UK. Only 3.2 per cent of them are unemployed, and more than three-quarters are working in the higher level managerial and professional posts, which attract above average salaries. For the majority of graduates, therefore, higher education has been a good investment. Will this still be true if the graduate population continues to swell?

The author was formerly Labour Market Analyst at the Higher Education Careers Services Unit, an agency of the Committee of Vice-Chancellors and Principals

PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebooksNow available in paperback
Arts and Entertainment
booksPhotographer Richard Young has been snapping celebrities at play for 40 years - but he says it wasn’t all fun and games...
News
i100
Sport
Aguero - who single-handedly has kept City's Champions League dreams alive - celebrates his dramatic late winner
footballManchester City 3 Bayern Munich 2: Argentine's late hat-rick sees home side snatch vital victory
News
Muhammad Ali pictured in better health in 2006
peopleBut he has enjoyed publicity from his alleged near-death experience
Arts and Entertainment
Tony breaks into Ian Garrett's yacht and makes a shocking discovery
TVReview: Revelations continue to make this drama a tough watch
News
news
News
peopleSinger tells The Independent what life is like in rehab in an exclusive video interview
News
The assumption that women are not as competent in leadership positions as men are leads to increased stress in the workplace
science... and it's down to gender stereotypes
Arts and Entertainment
Inner sanctum: Tove Jansson and friends in her studio in 1992
booksWhat was the inspiration for Finland's most famous family?
News
i100
Arts and Entertainment
Singer songwriter Bob Dylan performs on stage
films
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Education

Austen Lloyd: Employment Solicitor

£30000 - £60000 per annum + Excellent: Austen Lloyd: Employment Solicitor - Ke...

Ashdown Group: HR Generalist - 2 week contract - £200pd - Immediate start

£200 per day: Ashdown Group: Working within a business that has a high number ...

Randstad Education Cardiff: Maths Teacher

£100 - £120 per day: Randstad Education Cardiff: We are currently recruiting f...

Randstad Education Cardiff: Science Teacher

£100 - £120 per day: Randstad Education Cardiff: Science Teacher -Full Time - ...

Day In a Page

Homeless Veterans Christmas Appeal: Drifting and forgotten - turning lives around for ex-soldiers

Homeless Veterans Christmas Appeal: Turning lives around for ex-soldiers

Our partner charities help veterans on the brink – and get them back on their feet
Putin’s far-right ambition: Think-tank reveals how Russian President is wooing – and funding – populist parties across Europe to gain influence in the EU

Putin’s far-right ambition

Think-tank reveals how Russian President is wooing – and funding – populist parties across Europe to gain influence in the EU
Tove Jansson's Moominland: What was the inspiration for Finland's most famous family?

Escape to Moominland

What was the inspiration for Finland's most famous family?
Nightclubbing with Richard Young: The story behind his latest book of celebrity photographs

24-Hour party person

Photographer Richard Young has been snapping celebrities at play for 40 years. As his latest book is released, he reveals that it wasn’t all fun and games
Michelle Obama's school dinners: America’s children have a message for the First Lady

A taste for rebellion

US children have started an online protest against Michelle Obama’s drive for healthy school meals by posting photos of their lunches
Colouring books for adults: How the French are going crazy for Crayolas

Colouring books for adults

How the French are going crazy for Crayolas
Jack Thorne's play 'Hope': What would you do as a local politician faced with an impossible choice of cuts?

What would you do as a local politician faced with an impossible choice of cuts?

Playwright Jack Thorne's latest work 'Hope' poses the question to audiences
Ed Harcourt on Romeo Beckham and life as a court composer at Burberry

Call me Ed Mozart

Paloma Faith, Lana del Ray... Romeo Beckham. Ed Harcourt has proved that he can write for them all. But it took a personal crisis to turn him from indie star to writer-for-hire
10 best stocking fillers for foodies

Festive treats: 10 best stocking fillers for foodies

From boozy milk to wasabi, give the food-lover in your life some extra-special, unusual treats to wake up to on Christmas morning
Phil Hughes head injury: He had one weakness – it has come back to haunt him

Phil Hughes had one weakness – it has come back to haunt him

Prolific opener had world at his feet until Harmison and Flintoff bounced him
'I have an age of attraction that starts as low as four': How do you deal with a paedophile who has never committed a crime?

'I am a paedophile'

Is our approach to sex offenders helping to create more victims?
How bad do you have to be to lose a Home Office contract?

How bad do you have to be to lose a Home Office contract?

Serco given Yarl’s Wood immigration contract despite ‘vast failings’
Green Party on the march in Bristol: From a lost deposit to victory

From a lost deposit to victory

Green Party on the march in Bristol
Putting the grot right into Santa's grotto

Winter blunderlands

Putting the grot into grotto
'It just came to us, why not do it naked?' London's first nude free runner captured in breathtaking images across capital

'It just came to us, why not do it naked?'

London's first nude free runner captured in breathtaking images across capital