In June this year, I found myself at an event at my old university. It was a great excuse to catch up with some friends that I hadn’t seen in three years. Over the course of the evening a revelation slowly dawned on me: of all the people I spoke to (perhaps 40 or so), only two of them now worked and lived somewhere other than Oxford (where I went to university) or London.
I didn’t think about this again until about three months ago, when I was contacted by the Higher Education Statistics Authority (HESA) to complete their graduate outcomes survey. As I now know, all graduates, 15 months after graduating, are invited to fill out a survey detailing how they’re doing (in terms of their salary and wellbeing), what they’re doing and where they’re doing it. This data is then crunched by HESA and uploaded here.
I found myself wondering whether the experience of my 40 or so peers signalled a wider trend in where undergraduates live and work upon graduating.
Why does where gradates work matter? In the macro, the presence of graduates is an important factor in securing and sustaining economic development. A 2015 Government report found that the increase in the number of graduates in the 2000s was “the largest contribution to labour productivity growth” whilst another from 2013 concludes that “a 1% increase in the share of the workforce with a university degree raises the level of long run productivity by 0.2-0.5%”.
This tells us that graduates are important to the UK economy overall – but what about at a regional level? A 2015 study by the US based Brookings Foundation found that those who hold a bachelor’s degree contribute $278,000 (£223,000) more to a local economy over a lifetime than those without one, whilst the University of Birmingham is currently undertaking research into this very issue. Therefore, if levelling up is a priority, so too is where graduates end up.
Of all those who graduated with their first degree in the academic year 2020/21, where were they working, 15 months after graduating? [1]
As this shows, the largest group of graduates ends up working in London, which receives over twice as many graduates as the next most popular region, the South East. When compared with where students come from, you can also observe that the largest group of undergraduate students comes from London, but this isn’t commensurate with the proportion that work in London. When mapped, this trend is even more striking.
To be clear – we’re somewhat comparing apples and oranges here. The HESA data includes information on where a graduate lived prior to going to university, but only includes data on where a graduate works after graduation. As such, the two aren’t perfectly comparable, but, given the majority of workers live within 40km of where they work [2], it’s a reasonable comparison to make. The main exception to this is London, with a large population of employees who work in the London region living outside it and commuting in.
Let’s break this down – the single biggest factor affecting where someone works after university is where they lived before they went to university. To illustrate this point, the graph, below, shows along the lefthand side the regions that graduates lived in prior to going to university, and along the bottom where graduates worked 15 months after leaving university.
Over half of graduates from each region stay on to work in the same region after graduating. However, the next-most-likely place graduates will move to is London (with the exceptions of graduates in the North East, who are more likely to work in Yorkshire and Humber, and Wales, where graduates are more likely to work in the South West or the North West).
So why do so many graduates end up working in London?
First, and perhaps most obviously, is jobs. As a graduate going through the recruitment process, it is rare to find a large company that does not offer jobs in London, even if they have offices elsewhere (and a lot of them don’t). It’s not just the private sector, for example all spots on the Civil Service Fast Stream are based in London (although they do plan on opening a new campus in Sheffield). So, London has more graduate jobs and attracts more graduates as a result.
Second, then, is the nature of London as a city. London (and I’ll admit this, even as someone who lives in Manchester) has a sparkling menu of live music, comedy, restaurants, theatre shows, pubs, sports, shopping… and that’s an appealing prospect for graduates who, possibly for the first time in their lives, are earning money and wanting to spend it. Of course, other cities have plenty to offer, but London’s allure runs deep. Without this cultural and social offer, it wouldn't be unreasonable to assume that graduates might be less inclined to work there.
The third factor is community. Graduates often follow their friends, and if London is where your friends are moving (and working), invariably – and not unreasonably – you’ll want to work there too. Never one to follow the crowd, I moved to Manchester to work, where I neither grew up nor attended university, and learnt the hard way that starting a social life from scratch takes time. Perhaps this also partly explains why so many graduates end up working in the same region they lived in prior to university – it’s familiar, and somewhere where they already have roots. Access to affordable housing (often back in the parental home), and wider cost of living pressures also play a part here no doubt, but community matters.
So, we know that over half of graduates stay in their home region post-graduation but, when they do move, they disproportionately move to London, and we've considered why that might be. But do they stay there? That’s a harder question to answer, but can be explored through the Department for Education’s LEO Graduate and Postgraduate Outcomes dataset, which tracks the regions in which graduates reside at different points after graduating. Instead of a survey, graduates are tracked using the Department for Work and Pensions’ Customer Information System (which essentially tracks them through their payslips). The below figure presents the proportion of the total graduate cohort that graduated one, three, five and ten years ago (i.e., in 2021, 2019, 2017, 2012) that lives (not works) in each region.
This shows that proportion of graduates living in each region stays roughly constant – London consistently has the highest proportion of graduates, hovering around 18%. Most likely this can be explained by graduates staying where they moved after graduation (including those returning to where they lived prior to university), at least for the ten years after graduation. There is a small decrease with time in the proportion living in London (possibly because they realise they can’t afford to live there…) and a small increase in those living in the North West (possibly because graduates realise they can afford to live there) but, in the grand scheme of things, the proportions hardly change.
Given all of the above, what are the implications for policy makers, particularly those in regions that are currently underrepresented in graduates? I think they are three-fold:
- Strike while the graduation iron is hot. Graduates often stay in the same region they move to immediately after graduation, because they will likely have put down roots. If you want to attract graduate talent, you need to do it early, as undergraduates are graduating. And to do this…
- Offer graduates jobs. It sounds obvious, but graduates want jobs and, if there aren’t the jobs going, they will move elsewhere.
- Offer more than jobs. Graduates don’t just want jobs. They want to move somewhere that offers them a rewarding, rounded life. That’s bars, cinemas, theatres, music venues, nice coffee, and so on.
As for me, I can’t say I know where I’ll be in 10 years – the data suggest I’ll still be in the North West, but I may have boomeranged back to Norfolk, Oxford or even relocated to London. Time will tell. Likewise, in the face of the rising cost of living, housing pressures, and efforts to support regional development and growth - for example, through innovation-focused “investment zones” targeting the creation of exactly the sort of jobs that will attract graduates - it will be interesting to see if these long-term trends on graduate locations might start to shift over time.
If you’d like to get in touch to discuss this blog and the data sources within it, please contact me at mtimms@sqw.co.uk.
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[1] All of the following analysis only refers to those who completed an undergraduate degree and those for who identify work as their single most important activity. It’s also important to note that the geographical data is only available at a regional scale; when a graduate has ‘stayed in the same region’, this doesn’t mean they have stayed in the same town.