The Class of ’99:
a study of the early labour market
experiences of recent graduates
Presentation of key findings
Kate Purcell, Peter Elias,
Rhys Davies and Nick Wilton
London, 27th October 2005
The University of the West of England
The issues we sought to address

Are graduates obtaining employment which uses
their HE skills and knowledge?

Which graduates have difficulty in obtaining
appropriate employment?

How has the move to mass higher education
impacted upon the labour market?

Has the expansion of higher education led to
greater equality of opportunity?

Is current policy to expand higher education
justified in the light of graduates’ experiences?
The research

Postal and web survey of 1:2 of all
domestically-domiciled students who gained
a first degree or diploma from a sample of 38
UK HEIs (same HEIs which provided
information about their 1995 graduates for an
earlier study)

Follow-up telephone interviews with selected
sub-sample

Data collected between February 2003 and
April 2004 – most survey data in May 2003
Regional composition of sample
20
18
Lived immediately before studying for your 1999 qualification
16
Where you were first employed after completing your 1999 course
14
Where currently employed/live
%
12
10
8
6
4
2
Ire
la
Iri
nd
sh
Re
pu
bl
ic
El
se
wh
er
e
N.
la
nd
Sc
ot
rth
No
W
al
es
Ea
st
An
Ea
gl
ia
st
M
id
la
W
nd
es
s
tM
id
la
nd
s
No
r
th
Yo
W
rk
es
s
t
an
d
Hu
m
b
es
t
W
th
Ea
st
So
u
th
So
u
on
ut
er
L
O
In
n
er
L
on
do
n
do
n
0
Parental background of sample (NSSEC)
by gender
50
45
40
35
Male
30
Female
25
20
15
10
5
0
Managerial
and
professional
occupations
Intermediate
occupations
Small
employers
and own
account
workers
Lower
Semi-routine
Neither
supervisory
and routine parent in paid
and technical occupations employment
occupations
Type of school attended,
by type of institution attended
70
Old University
50
1960s
University
40
Post-1992
University
30
HE College
%
60
20
10
0
St at e
co mp rehensive/ Sixt h
f o rm co lleg e
St at e g rammar scho o l
F ee p aying scho o l
Ot her
A level scores (or equivalent) of graduates
who completed their degrees under the
age of 25, by type of HEI
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Old University
0 to 9 points
10 to 19 points
New University
20 to 29 points
30 points or more
Subject of study, by gender
Arts
Female
Business Studies
Male
Education
Engineering
Hum anities
Interdisciplinary
Languages
Law
Maths & Com puting
Medicine & Related
Natural Sciences
Other vocational
Social Sciences
0
2
4
6
8
per cent
10
12
14
16
Reported use and usefulness of career
information and guidance sources by
graduates
90
80
Not useful
70
Useful
Per cent
60
50
40
30
20
10
0
Recruitm ent Agencies
Netw orks
Publications
Careers Advisory
Services
Situation at time of survey (2003/04), by
gender
Male
Female
69.5
65.7
1.5
4.7
In full-time employment (other)
16.6
17.6
In part-time employment (other)
1.7
3.1
Self-employed
4.2
3.0
Postgraduate study
6.5
8.3
Unemployed and seeking work
3.2
1.9
Out of the labour force/not seeking
work
0.8
1.7
Other
2.2
3.2
Full-time related to long-term career
plans
Part-time related to long-term career plans
Sector of employment at time of survey, by
gender
Agriculture, mining, quarrying
Manufacturing
Electricity, gas, water supply
Female
Construction
Distribution, hotels, catering
Male
Transport and tourist services
Information and communications sector
Banking, finance, insurance
Business services
Education
Other public services
Other
0
5
10
15
20
per cent
25
30
35
Occupation held at time of survey
%
45
40
35
30
25
20
15
10
5
0
Male
Female
Managers &
Senior
Officials
Professional
Associate Administrative
Occupations Professional & & secretarial
Technical
Occupations
Occupations
Other
The SOC(HE) classification
 Traditional graduate occupations
 Modern graduate occupations
 New graduate occupations
 Niche graduate occupations
 Non-graduate occupations
( For more details, see www.warwick.ac.uk/go/glmf )
The changing structure of graduate occupations
in the UK, 1980 - 2000
40
Niche graduate job
New graduate job
35
Modern graduate job
% of total employees in employment
30
Traditional graduate job
25
20
15
10
5
0
1980
2000
Females
1980
2000
Males
Source: New Earnings Survey Panel Dataset 1975-2000
Changing structure of occupations, UK, 19842014
20,000
18,000
16,000
12,000
10,000
This study
8,000
Major Groups 1, 2 and 3
6,000
4,000
Major Groups 4, 5, 6, 7, 8 and 9
2,000
20
14
20
11
20
08
20
05
20
02
19
99
19
96
19
93
19
90
19
87
19
84
0
19
81
Thousands
14,000
Year
Source:
Unpublished estimates and projections of employment: Warwick Institute for Employment Research /
Cambridge Econometrics, 2005
Comparison of early career trajectories of
‘95 and ‘99 graduates
100%
90%
80%
70%
Employed (1995 graduate)
Employed (1999 graduate)
Unemployed (1995 graduate)
Unemployed (1999 graduate)
Study (1995 graduate)
Study (1999 graduate)
per cent
60%
50%
40%
30%
20%
10%
0%
1
3
5
7
9
11
13
15
17
19
21
23
25
27
29
31
m onths follow ing graduation
33
35
37
39
41
43
45
47
The occupational evolution of
employment among ‘99 graduates
100
Non-graduate
job
80
Niche
graduate job
70
60
New graduate
job
50
40
Modern
graduate job
30
20
Traditional
graduate job
10
months following graduation
46
43
40
37
34
31
28
25
22
19
16
13
10
7
4
0
1
per cent of all in employment
90
Movement of ‘95 and ‘99 graduates out of
non graduate jobs
50
45
1995
graduating
cohort
% of employed graduates in non graduate jobs
40
35
30
25
20
1999
graduating
cohort
15
10
5
0
1
2
3
4
5
6
7
8
9
10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42
Months since graduation
Exit of ’99 graduates from non-graduate
employment by degree subject
80%
70%
Arts
Humanities
60%
Languages
Law
Social Sciences
Mathematics & Computing
40%
Natural Sciences
Medicine & Related
30%
Engineering
20%
Business Studies
Education
10%
months follow ing graduation
46
43
40
37
34
31
28
25
22
19
16
13
10
7
4
0%
1
per cent
50%
SOC(HE) distributions of ‘95 and ‘99
graduates 3.5 and 4 years after graduation
1995
25
1999
per cent
20
15
10
5
0
Traditional
graduate job
Modern
graduate job
New graduate
job
Niche graduate
job
Non-graduate
job
Factors considered relevant by ’99 graduates in
obtaining current job
SOC (HE) category (%)
NonAll in
graduate employment
Traditional
Modern
New
Niche
Possession of degree
92
83
79
63
47
74
Subject studied
73
57
50
39
29
50
Class of degree obtained
48
33
34
24
14
31
Recognition by
professional body of
undergraduate course
28
18
20
11
5
17
Postgraduate
qualification
34
15
11
8
8
15
Professional qualification
gained subsequently
34
10
13
10
8
15
Experience in current
organisation in other job
16
16
17
21
16
17
Employment experience
in another organisation
25
31
40
37
40
36
A comparison of the job quality of ‘95
and ‘99 graduates
Worse
Better
Who is in a non graduate job four years
after graduation?
Employment in non-graduate occupations varies by:
 Subject (Medicine 5%, Arts/Humanities 20%+)
 Degree class (1st 10%, 3rd 25%)
 HE type (Old 14%, HE College 23%)
 Unemployment since graduation (none 15%, 6
months 31%)
 Geographical mobility (Move 14%, Stay 19%)
 Gender and age
 Work experience while studying
Are the earnings of graduates
declining?
Graduate earnings premium in the UK is higher than in
many other countries – is it holding up or is it falling?
Limited evidence so far indicates that there may have
been a decline in the premium – but how can we tell
when we only study graduates?
Compare earnings of 1995 graduates in 1998/99 with
1999 graduates in 2003/04:
 adjust for earnings inflation;
 adjust for longer time spent in labour market by
1999 graduates.
1995 graduates in
1998/99
1999 graduates in
2003/04
Mean
Mean
Median
Median
% growth
Mean
Median
Males
£21,585 £20,163
£25,875 £24,062
20
19
Females
£18,441 £17,611
£22,479 £21,524
22
22
Total
£19,813 £18,515
£23,754 £22,301
20
22
Between December 1998 and May 2003, UK index of average earning
grew by 25%
After adjusting for the greater length of time spent in the labour market
by the 1999 cohort, estimate that the earnings of the 1999 cohort are
lagging behind those of the 1995 cohort by about 10%
Other recent research shows similar picture (O’Leary and Sloane 2005;
McGuiness and Doyle 2005). Nevertheless, the return to a degree
remains substantial.
What factors are associated with variation
in earnings and the gender pay gap?

We conducted a detailed multivariate analysis of
the variations in earnings of graduates in full-time
employment in 2002/03 (excluding those aged 38
and over).

We tested for variations associated with social
class, entry qualifications, class of degree, post
graduate qualifications, type of institution, age,
gender, a range of job characteristics and family
situation
What factors are strongly related to
variations in earnings graduates working
full-time?

Working hours (+1% per additional hour)

Degree required by employer (18% addition)

Sector (ICT, banking, business services: +4% to
+12% more than other sectors)

Age (3% more per additional year of age)

Disability (7% less)

Type of job held (-12% to -17% for nongraduate
job)
What factors are strongly related to
variations in earnings? (contd.)

Class of degree (15% less for a third class)

Subject studied (Arts -6%, maths & computing +7%,
medicine and related +20%: relative to social
sciences)

Lives in London and SE (+23% for Inner London,
+17% for Outer London)

Contractual status (-13% if self employed)

Gender context at work (-13% if works exclusively
with women)

Gender (5% less if female)
Response to statement ‘In my workplace,
my type of job is done …’
Average earnings by gender context at
work and gender of respondents
£30,000
Men
Women
Average annual gross earnings
£25,000
£20,000
£15,000
£10,000
£5,000
£…almost exclusively
by men
…mainly by men
…by a fairly equal
mixture of men and
women
…mainly by women
In my workplace, my type of work is done...
…almost exclusively
by women
Why do graduate women in their early
careers earn less than similarly-qualified
males?

Less investment in human capital by women?

Different kinds of skills – valued less?

Discontinuous employment? Part-time working?


Different values and attitudes to career
development and work/life balance?
Underachievement? Different ambitions or
expectations?

Rational choice now to future work/life paths?

Discrimination by employers?
Age profiles of hourly earnings by gender
and qualifications, 1999 - 2003
20
Hourly earnings (£/hr)
18
Male, first degree
16
Female, first
degree
Male, A levels
14
Female, A levels
12
10
8
6
4
2
0
21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50
Source: Labour Force Surveys, 1999 - 2003.
Age
Moving from ‘accounting for’ to ‘explaining’
the gender pay gap

Implications of cumulative gendered ‘choices’

Are differences employment-related or reflecting
wider differences in values and aspirations

Work/life balance and ‘the sex/gender dilemma’

Practical obstacles to equality of opportunity in
employment

Gender stereotypes at work as constraints

Discrimination, harassment and the challenge of
being ‘a woman in a man’s world’
The financial legacy

81% of young graduates had repayable debt, mean
£6,205, median £5,500.

Term time employment more prevalent among
lower social class groups.

Term time employment associated with poorer
degree performance.

Those who indicated that their options had been
limited by debt were:

less likely to undertake further study;

more likely to be employed in nongraduate jobs.
Debts and further study - 2(i)s
20%
No Debt
Debt - No Problem
15%
10%
5%
months following graduation
47
43
45
39
41
35
37
31
33
27
29
23
25
19
21
15
17
11
13
9
7
5
3
0%
1
per cent
Debt - Problem
Debts and non-graduate jobs – 2(i)s
70
60
No Debt
Debt - No Problem
Debt - Problem
40
30
20
10
m onths follow ing graduation
47
45
43
41
39
37
35
33
31
29
27
25
23
21
19
17
15
13
11
9
7
5
3
0
1
per cent
50
Paid employment during course and
degree result
60
50
no work
vac only
term only
40
per cent
both
30
20
10
0
1
2(i)
2(ii)
3
degree classification
Pass/Diploma
Ordinary degree
1999 graduates’ satisfaction with career
4 years on, by gender
60
Male
50
Female
per cent
40
30
20
10
0
Very satisfied
Reasonably
satisfied
Not very satisfied
Dissatisfied
Extent to which respondents would, with
hindsight, do degree again, by gender
70
60
50
Male
%
40
Female
30
20
10
0
Do the same course Do a similar course at Do a different course
at the same place
a different place
Choose not to enter
higher education
Summary
 Proportion of graduates in the labour force will
continue to rise steadily, at least until 2020.
 The demand for graduate skills and knowledge is
projected to grow.
 Shortages of high level technical skills are likely to
continue (esp. medicine).

Graduates are likely to displace non graduates in
competition for ‘new’ graduate jobs.
 Gendered boundaries in graduate employment
becoming less distinct – work/life balance policies will
become increasingly important.
 The extension of HE participation has, so far,
disproportionately benefited those from relatively
privileged backgrounds – which presents a major
challenge for the policy community.
To find out more about this and the team’s
other research on the graduate labour
market, check out the following links:





www.dfes.gov.uk/research/...?
www.delni.gov.uk/statistics/
www.warwick.ac.uk/ier
www.uwe.ac.uk/bbs/research/esru/
www.hecsu.ac.uk
The University of the West of England