University leavers living outside London are increasingly unable to fully capitalise on their education because graduate-level jobs are becoming more concentrated in the UK’s capital, according to new research.
A paper published by the Institute for Fiscal Studies on 13 November says that 42 per cent of university-educated workers outside London work in a job that does not require a degree, up from 31 per cent in 1993.
In contrast, the share of graduates in non-graduate jobs in London has remained fairly stable over the past few decades, at about 37 per cent.
There are some parts of the UK where more than half of graduates work in non-graduate jobs, as defined by the Regulatory Qualifications Framework, such as Lincolnshire and Cumbria (58 per cent and 52 per cent, respectively).
The report, by Xiaowei Xu, a senior research economist at the IFS, notes that the share of workers with a degree has increased all across the UK over the past three decades, with the overall proportion increasing from 13 per cent to 42 per cent.
However, graduate jobs have become much more concentrated in London, particularly inner London, where 65 per cent of in-work graduates work in a job that requires a degree.
“Some of the places that have seen the biggest increases in their graduate share between 1993 and 2022, in percentage terms, have seen the biggest falls in the share of graduates doing graduate jobs. This suggests that the supply of graduates has outstripped demand in many places, consistent with the finding…that the graduate wage premium has fallen in all regions outside London,” the report says.
The report says that moving to London gives graduates a much better chance of accessing a high-skilled job, but notes that this route is “predominantly open to those from wealthier family backgrounds”, meaning that those from less affluent families are “unlikely to fully reap the returns to their education”.
“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,” Ms Xu said.
“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.”
