What does a recession mean for graduates in 2023

Dec 19, 2022 | Research, Sector & policy

New analysis from Prospects at Jisc reveals what a recession may mean for graduates.

This year’s edition of What do graduates do? has launched and is available to read on Prospects Luminate.

This in-depth analysis of HESA’s Graduate Outcomes survey provides a comprehensive picture of graduate career activity post-university. It offers insight to what a recession means for graduates in 2023.

The report is an essential resource for anyone wanting to understand the graduate labour market and outcomes for UK first-degree graduates 15 months after finishing university. You can read more about using the Graduate Outcomes survey in the blog Why is Graduate Outcomes data so useful?

Here are three trends evident in this year’s edition.

Graduates are less vulnerable in a recession

Graduates in this edition of What do graduates do? left university during the Covid-19 pandemic when significant restrictions were in place and job vacancies reached bottom in June 2020, running at around 39% of pre-pandemic levels (ONS).

Despite the severity of the labour market that they graduated into, 15 months after they had left university, more 2020 graduates were employed or studying than the previous year.

While 80% were in employment (including 10.9% who were working and studying), 9.3% had embarked solely on further study and just 4.2% were unemployed. These figures are not dissimilar to the figures we might expect for a ‘normal’ year.

The report also shows the extent to which grade counts. Graduates with a first-class degree were most likely to be in full-time employment (71%) than those with a 2:1 (67%), 2:2 (67%) or Third (69%). This is despite the ISE’s latest data that shows number of employers using degree results as minimum entry criteria is in decline.

By illustrating how rapidly the graduate labour market rebounded from Covid-19, we can see just how employable, resilient and adaptable UK graduates are in economic turmoil. Even in a pandemic that locked down the UK economy, the large majority of new graduates got jobs.

Most graduates get good jobs

This graduate cohort was more likely to be in professional level employment than their peers a year previously with 74% of working graduates in professional level employment after 15 months.

This proportion increased to 95% among those who had gained their degree as part of an apprenticeship with 42% working as engineering and IT professionals.

All professional level roles saw increases in entry. The occupations that saw the greatest increases in employment between the two years were nursing, marketing and graphic design. Unsurprisingly, retail roles were among those worst hit.

Inequalities persist

While most graduates get good jobs and are less vulnerable in a recession, we can’t get away from the fact that inequalities persist.

In the last recession, the graduate labour market was, by some distance, the least affected part of the labour market. But, recessions exacerbate disadvantage.

The report reveals that the graduate labour market is not a homogenous group and sheds light on inequalities in employment outcomes.

For example, 60% of white graduates were in full-time employment 15 months after graduation compared with 51% of black, Asian and minority ethnic (BAME) graduates.

The gap is even wider for Asian or Asian British-Pakistani graduates with a difference in outcomes of 11 percentage points and Chinese graduates have the highest unemployment rate (11.6%).

In addition, 75.2% of employed white male graduates are in professional-level jobs compared to 61.3% of female Asian-Bangladeshi graduates.

What does this mean for graduates in 2023?

Looking forward, What do graduates do? 2022 can be used to inform projections for next year’s graduates who will likely enter the labour market in a recession.

The economic signals are not good. Inflation has increased rapidly and to levels not seen for many years, and the expectation is that it will rise significantly further. Energy bills have skyrocketed. Despite the country looking set to enter a very difficult period, there is every reason to believe that most graduates will get good jobs.

That said, we are already starting behind and we need to work harder to ensure that all graduates have equal chances regardless of their backgrounds or characteristics.

 Read more insight and data on the graduate labour market

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