Calendar Year 2021

Graduate labour market statistics

This is the latest dataOfficial statistics
Published

Introduction

These statistics show labour market conditions for the following groups living in England:

  • Graduates
  • Postgraduates
  • Non-graduates

This release also sets out a breakdown of graduate outcomes by different subcategories, such as by age group and gender.


Headline facts and figures - 2021

Working-age graduates and postgraduates continue to have higher employment rates than non-graduates. The employment rates for working-age graduates and postgraduates increased in 2021 while it fell for working-age non-graduates, widening the gap between these groups, and representing the first time that the gap has widened between graduates and non-graduates since 2013.

In 2021, the employment rate for working-age graduates (those aged 16 – 64) was 86.7%, an increase of 0.4 percentage points on 2020 (86.3%). For working-age postgraduates the employment rate was 88.2%, an increase of 0.1 percentage points on 2020 (88.1%). For working-age non-graduates the employment rate was 70.2%, a decrease of 0.9 percentage points on 2020 (71.1%).

In 2021, 65.2% of working-age graduates were in high-skilled employment, compared to 77.4% of postgraduates and 24.3% of non-graduates. In 2021, the percentage of working-age graduates and postgraduates in high-skilled employment was 0.4 percentage points lower and 0.6 percentage points lower than in 2020 respectively. In comparison, the percentage of working-age non-graduates in high-skilled employment was 0.1 percentage points higher than in 2020.

In 2021, the median salary for working-age graduates was £36,000. This was £10,000 more than working-age non-graduates (£26,000) but £6,000 less than working-age postgraduates (£42,000). The gap in median salaries between working age- graduates and non-graduates has not changed from 2020.

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Key Statistics

For graduates, employment rates recovered slightly after two consecutive years of decline, rising to 86.7%, from 86.3% in 2020. This follows a period of modest but sustained increases between 2009 and 2018, when the rate peaked at 87.7%. 

The postgraduate employment rate rose by 0.1 percentage points in 2021, which was smaller than the 0.4 percentage point increase for graduates. The gap between the two employment rates reduced from 1.8 percentage points in 2020 to 1.5 percentage points in 2021.  

For the second consecutive year, the non-graduate employment rate fell from 71.1% in 2020 to 70.2% in 2021. Analysis by the Office for National Statistics[1] suggests that this decline could be partly explained by the impact of the coronavirus (COVID-19) pandemic. They found that workers with lower qualifications were more likely to be placed on furlough and less likely to work from home, and as a result, these workers were more likely to lose their jobs and drop out of the workforce.

[1] ONS (2022)  How furlough and changes in the employee workforce have affected earnings growth during the coronavirus (COVID-19) pandemic, UK: 2020 to 2021.

While employment rates for graduates and postgraduates were broadly similar in 2021 (a 1.5 percentage point differential), there was a greater difference between their respective high skilled employment rates, which was 12.2 percentage points higher for postgraduates than graduates.

Notably for non-graduates, high-skilled employment comprised a much smaller share of overall employment than for the other groups. Only 24.3% of non-graduates were in high-skilled employment; by comparison, 65.2% of graduates and 77.4% of postgraduates were in high-skilled employment at this time. That said, the proportion of non-graduates in high-skilled employment has been increasing consistently since 2016, while conversely the proportion of graduates and postgraduates in high-skilled employment has fallen over this period.

Median (nominal) salaries increased for both graduates and non-graduates in 2021, with the graduate premium (represented by the difference between the two salaries) widening to £10,000. 

Median salaries for postgraduates have returned to the same level as in 2019 (£42,000).Meanwhile over the same period, graduate and non-graduate salaries have both increased, with graduate salaries increasing from £34,000 in 2019 to £36,000 in 2021, and non-graduate salaries increasing from £25,000 in 2019 to £26,000 in 2021.

Comparisons over time and other interpretations of these data should be made with caution. The median salary figures in this publication are not adjusted for inflation and are rounded to the nearest £500.

Introduction

The Graduate Labour Market Statistics (GLMS) in this publication cover labour market conditions for English domiciled graduates and postgraduates and compare these to English domiciled non-graduates. This edition of the GLMS summarises the annual employment and earning outcomes data for graduates, postgraduates, and non-graduates in 2021. 

All earnings data in this publication are calculated for full-time workers only. In addition to the median outcomes data, this publication also provides the employment and earnings outcomes of graduates by various characteristics, in particular age group and gender. Outcomes by age group are presented for both the working-age (16 – 64 year olds) and young (21 – 30 year olds) populations. Outcomes are also broken down by ethnicity, disability status, degree class and sector of employment. Part-time workers’ employment outcomes are broken down by age group and gender. Further breakdowns covering region, subject and occupation are also contained in the underlying data files. 

This publication provides time series data covering the period from 2007 to 2021, which enables us to identify and understand key trends in the headline statistics over time. As the results presented in the publication are based on quarterly survey data, they represent estimates. Any findings should be interpreted with caution as they may not necessarily be statistically significant. The employment and earnings outcomes for 2020 and 2021 should be viewed against the backdrop of the significant adverse shock to the UK macroeconomy due to the coronavirus (COVID-19) pandemic which severely disrupted business activity in many sectors of the UK economy. 

In this publication, graduates refer to people whose highest qualification is an undergraduate degree at Bachelor’s level; postgraduates are those holding a higher degree (such as a Master’s or PhD) as their highest qualification; and non-graduates are those whose highest qualification is below undergraduate level, i.e. National Qualification Framework Level 5 or below (see methodology note for more details). 

The GLMS only provides simple outcome measures based on survey data and does not control for the differences in characteristics between graduates, postgraduates, and non-graduates. This means that the outcomes reported may not be wholly attributable to the fact that an individual holds a particular qualification, but instead could reflect other factors, such as their skills, experience, or geographic location.

Note that degree apprenticeships cannot currently be identified in the underlying LFS data. Individuals with a degree apprenticeship as their highest qualification are recorded against either the ‘degree’ or ‘trade apprenticeship’ category. Since we classify ‘trade apprenticeships’ as ‘non-graduates’, this means that the ‘graduate’ category will undercount and the ‘non-graduate’ category will overcount. The Office for National Statistics has confirmed that a graduate apprenticeship category will be in included for the January to March 2022 quarter onwards.

Further information on the methodology used and validity of the estimates can be found in the methodology section and supporting data. Because annual summaries are based on populations which are themselves derived from the summation of quarterly data sets, it is not possible to produce confidence intervals for this analysis.

Headline Outcomes

Graduates and postgraduates had broadly similar employment, unemployment, and inactivity rates in 2021, with postgraduates seeing slightly better outcomes across all metrics. 

Employment outcomes for non-graduates were considerably different across all three metrics. For example, the non-graduate inactivity rate was more than double that of both graduates and postgraduates, with over one in four non-graduates being economically inactive. 

Employment rates for the young population are similar to the working-age population. For graduates and postgraduates, the difference between the young and working-age populations is small . For non-graduates, the difference between these populations is larger, with the employment rate being 4.2 percentage points higher for the young population.

Inactivity rates are lower across all graduate types in the young population compared to the working-age population, with non-graduates seeing the largest differential in inactivity rates (5.6 percentage points). 

Unemployment rates are higher for all graduate types in the young population compared to the working-age population, with postgraduates seeing the largest difference in unemployment rates across the two groups (2.4 percentage points differential). 

High-skilled employment rates are higher across all graduate types in the working-age population compared to the young population. This difference was more pronounced among graduates and postgraduates (6.2 percentage points and 4.5 percentage points differential) compared to non-graduates (2.3 percentage points differential). This conforms to the notion that skills accrue to workers throughout their careers, helping them to progress into more technical jobs as they get older. 

Across both working-age and young populations, postgraduates had the highest (nominal) salaries, followed by graduates, and then non-graduates who had the lowest (nominal) salaries, on average.

Median salaries diverged across young and working-age populations. This disparity was most significant in the postgraduate group, with salaries being £10,000 higher than the young population. In comparison, these differences for graduate and non-graduate groups were £8,500 and £3,000, respectively. This conforms to the notion that earnings growth is more pronounced later within a person’s working life, but people with higher levels of education can expect to see the most growth. 

Year-on-year Changes

Unemployment rates fell for both working-age and young graduates in 2021, with the working-age graduate unemployment rate dropping by 0.5 percentage points, and the young graduate unemployment rate falling by 1.3 percentage points.

While the unemployment rate for working-age postgraduates fell slightly in 2021 (by 0.2 percentage points), the young postgraduate unemployment rate increased (by 0.9 percentage points to 4.9%).

Time Series Data (2007 - 2021)

Over the period 2007-2021, employment rates have fluctuated slightly more for the young population than the working-age population. This might suggest that the employment of young people is disproportionately influenced by changing structural conditions in the economy or, alternatively, that young people are more responsive with their labour supply.

Whilst employment rates for both graduates and postgraduates in the working-age population increased slightly in 2021, within the young population only graduates saw increasing employment rates. The postgraduate employment rate for young people decreased slightly from 88.1% to 87.4%.

While the non-graduate employment rate remained the same within the young population in 2021 (74.4%), the working-age population saw a second year of decline, from 71.1% in 2020 to 70.2% in 2021.

Similar to the trend in employment rates, between 2007 and 2021, high-skilled employment rates have fluctuated slightly more for the young population than the working-age population. Overall, however, high-skilled employment rates have varied less since 2007 than employment rates. This suggests that high-skilled jobs are more secure and less susceptible to economic shocks. 

Non-graduates were the only group whose high-skilled employment rate was above 2007 levels in 2021; this was true for both young and working-age populations. 

The graduate unemployment rate fell in 2021 across both age groups (dropping by 1.3 percentage points in the young population, and by 0.5 percentage points in the working-age population). Meanwhile the non-graduate unemployment rate stayed the same in the working-age population, and decreased slightly in the young population (by 0.3 percentage points). This widened the gap between non-graduate and graduate unemployment rates in both the working-age and young populations to 2.3 and 2.1 percentage points, respectively. 

Since 2007, the postgraduate unemployment rate has remained persistently below that of the graduate group within the working-age population. Meanwhile, for the young population, the postgraduate unemployment rate has remained below that of the graduate unemployment every year except 2010 and 2017, while in 2018 and 2021 these rates were the same.

Median (nominal) salaries were higher in the working-age population than the young population for graduates, postgraduates, and non-graduates in 2021. The median salary differential was largest for postgraduates and smallest for non-graduates. This might reflect that postgraduates take longer to obtain higher wages after leaving study or might be attributable to postgraduates entering the labour force when they are older, thus having less time to increase their wages before the age of 30. Wage differentials could also be a product of heterogeneity between the types of people who undertake different levels of study, their motivations, and their characteristics, rather than due to the qualification itself. 

In 2021, median (nominal) salaries were higher for males than females across all graduate types and across both age groups. The salary differential between males and females was greatest for working-age graduates at £8,000, lower than in 2019 when the differential reached £10,000. 

Since median salaries are calculated for individuals employed in full-time work only, the higher proportion of females in part-time work does not contribute to the gender pay gaps in these figures. Data on the proportion of men and women in part-time work can be found in the Office for National Statistics’ dataset on full-time, part-time and temporary workers

Using median salaries mitigates against average values being skewed by extremes. It does, however, conceal other features of the data, for example, that the difference in pay between the sexes is largest among high earners. Further analysis of the gender pay gap in 2021 can be found in the Office for National Statistics’ publication: The gender pay gap in the UK: 2021.

Median Salaries by Industry

Males employed in Construction and in Transport and Communications had the highest median salaries across both working-age (£45,000) and young (£34,000) populations. Similarly, females employed in Transport and Communication saw the highest median salaries across both working-age (£39,500) and young (£32,500) populations.

Males and Females employed in Distribution or Hotels, or Restaurants had the lowest median salaries across both working-age (£29,500 and £24,500 respectively) and young (£24,000 and £22,500 respectively) populations. 

Across all industries and age groups, males had higher median salaries than females. 

Importantly, female Construction industry data for the young population have been suppressed due to limited available data. Comparisons against this group are therefore not possible. These data might impact some of the key findings.

Further analysis of the gender pay gap in 2021 can be found in the Office for National Statistics’ publication: The gender pay gap in the UK: 2021.

Disability, Ethnicity and Degree Class Breakdowns

Working-age disabled graduates had lower employment (73.8%) and high-skilled employment (50.8%) rates than non-disabled graduates (88.8% and 67.6%, respectively). The inactivity rate for disabled graduates (22.6%) was more than double the rate for non-disabled graduates (8.5%).

White working-age graduates had the highest employment rate (87.2%) and high-skilled employment rate (66.5%). Other Ethnic Group graduates saw the lowest employment rate (82.8%), while Black, African, Caribbean, or Black British graduates saw the lowest high-skilled employment rate (51.6%). 

Inactivity rates exhibited the least variation between ethnic groups – only 2.5 percentage points. Black or African or Caribbean or Black British graduates had the lowest inactivity rate (9.8%). Graduates in the Other Ethnic Group had the highest inactivity rate (12.3%).

Black, African, Caribbean, or Black British graduates had the highest unemployment rate (7.0%), more than twice the rate of White graduates, who had the lowest rate (2.7%). 

In 2021, working-age graduates with Upper Second (2:1) class degrees had slightly higher employment rates and lower inactivity rates than their counterparts with First class degrees. This stands out against an otherwise ordinal pattern of higher degree classes being associated with higher employment and high-skilled employment rates, and lower inactivity and unemployment rates. 

Working-age unemployment rates were very similar across all degree types, with only a 2.3 percentage point difference between the highest (5% for those with a Third class degree) and lowest (2.7% for those with a First class degree).

Part-Time Employment

Female workers were more likely to be in part-time employment than males in 2021, with female non-graduates accounting for the largest share (40.8%) of total workers in part-time employment. Across both graduate types, females were over three times more likely to be in part-time employment than their male counterparts. 

All graduate and gender breakdowns saw a smaller proportion of workers in part-time employment in 2021, except for male non-graduates, who saw a 0.5 percentage point increase in the proportion in part-time employment over this period. Analysis completed by the Office for National Statistics (ONS)[1] suggests that this is likely to be the effect of coronavirus (COVID-19) pandemic restrictions on the number of part-time jobs, due to large numbers of part-time workers being employed within heavily restricted industries such as accommodation and food service activities. The ONS also note that this impact decreased throughout 2021 as restrictions eased.  

All graduate and gender breakdowns saw a larger proportion of workers in part-time employment in 2021 than in 2007, except for female non-graduates, who saw a lower proportion in part-time employment (40.8% in 2021 compared to 45.7% in 2007). 

[1] ONS (2022) How furlough and changes in the employee workforce have affected earnings growth during the coronavirus (COVID-19) pandemic, UK: 2020 to 2021.

Across all age breakdowns, non-graduates had a higher proportion of workers in part-time employment than graduates. 

Both graduates and non-graduates show a trend whereby older age cohorts were associated with higher proportions of workers being in part-time employment compared to younger cohorts. 

The difference between the proportion of workers in part-time employment across graduates and non-graduates decreases consistently through older cohorts, with a gap of 7 percentage points among 21 - 30 year olds, reducing to only 1 percentage point among 51 – 60 year olds.

Graduates consistently see a higher proportion in part-time employment among the working-age population than in the young population. 

There was some similarity in trends across the working-age and young populations, though there was greater fluctuation for young graduates compared to their working-age counterparts. Both age groups have seen a continued decline in the proportion in part-time employment since 2019.

Non-graduates consistently see a higher proportion in part-time employment among the working-age population than in the young population.

In percentage point terms, the proportion of young non-graduates in part-time employment has fluctuated to a greater extent than working-age non-graduates.

For non-graduates, the proportion in part-time employment steadily rose from 2007 reaching a peak in 2010 (within the working age population) and 2013 (within the young population). Since then, both age groups have, on average, seen the proportion in part-time employment decline.

2021 saw the smallest proportion of working-age non-graduates in part-time employment at any point since the beginning of this series.

Further Information

Within the supporting data we have provided a more detailed focus on the employment and earnings outcomes of graduates by their specific characteristics. These breakdowns include:

o  Age group

o  Gender

o  Ethnicity

o  Disability status

o Degree class 

o Subject group 

o Occupation

o  Sector

o  Region

o  Part-time work

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Methodology

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Official statistics

These are Official Statistics and have been produced in line with the Code of Practice for Official Statistics.

This can be broadly interpreted to mean that these statistics are:

  • managed impartially and objectively in the public interest
  • meet identified user needs
  • produced according to sound methods
  • well explained and readily accessible

Find out more about the standards we follow to produce these statistics through our Standards for official statistics published by DfE guidance.

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