A significant and growing number of young graduates outside of London find themselves in jobs that do not require a degree, according to a warning from the Institute for Fiscal Studies (IFS).
This trend is driving many university-educated individuals to accumulate substantial student debt without reaping the expected economic benefits.
The IFS analysis revealed that a striking 42 percent of graduates working outside the capital are currently employed in roles that do not necessitate a degree.
This percentage has risen from 31 percent since 1993. The increase is primarily attributed to the concentration of well-paid positions in London.
The most dire situations for graduates outside London are seen in areas like Lincolnshire and Cumbria, where over half of the university-educated workforce is engaged in professions for which a degree is not required.
Xiaowei Xu, a representative from the IFS, explained, “The rise in high-skilled professional services jobs in the last 30 years has been very much focused on London, which means that graduates from other places need to move to reap the returns to their education.” She added, “This is often not an option for those from poorer family backgrounds. The current economic geography of the UK limits both social mobility and the effective use of talent across the country.”
What about in London?
In contrast, in London, around 37 to 38 percent of graduates end up in roles where a degree is superfluous. However, this figure has remained relatively stable over the past three decades.
The analysis also revealed that employment in high-paying occupations has risen by 95 percent since 1993 on a national scale. Still, this growth has been significantly more substantial in inner London, where it increased by 240 percent, compared to just 41 percent in regions like Cheshire.
The growing mismatch between skills and available jobs has a more significant impact on graduates from disadvantaged backgrounds who are the least likely to move to London, making them the most negatively affected by this trend.
The 2008 financial crisis is still having an impact
This issue comes to light as research from the Resolution Foundation shows that British millennials are still grappling with the financial aftermath of the 2008 financial crisis, unlike their American counterparts who have long since recovered. The think tank’s findings indicate that individuals in their early 30s in the UK have endured over two decades of stagnant wages, in stark contrast to the United States, where early 30s workers are earning 21 percent more than their predecessors at the same age.
Furthermore, homeownership rates for 30- to 34-year-olds in the UK have fallen by 20 percentage points since 1986, compared to just a 3 percent drop in the United States over the same period.
Sophie Hale from the Resolution Foundation emphasised the need for meaningful growth in the UK, highlighting the necessity for policy decisions that prioritise the economic well-being of younger generations, countering the current trend where income and wealth growth disproportionately benefit older generations.
Amelia Brand is the Editor for HRreview. With a Master’s degree in Legal and Political Theory, her particular interests within HR include employment law, DE&I, wellbeing within the workplace. Prior to working with HRreview, Amelia was Sub-Editor of a magazine, and Editor of the Environmental Justice Project at the University College London, writing and overseeing articles into UCL’s weekly newsletter. Her previous academic work has focused on philosophy, politics and law, with a special focus on how artificial intelligence will feature in the future.