Reassessing the employment outcomes of higher education

Higher education provision has expanded in recent decades. It is no longer an elite system preparing a select few for the traditional professions; instead it is a mass system educating ‘everyone for everything’. In addition, students are now required to contribute financially to their education in the UK. As more students enter the labour market, graduates’ employment outcomes are a key concern. This chapter concentrates on employment outcomes in the context of the expansion of higher education and the recent economic downturn. The issue of employment outcomes is separated into sub-issues: students’ entry into employment; the jobs in which graduates are employed; the graduate wage premium associated with those jobs; and the capacity of higher education to lever social mobility through those employment outcomes. In exploring these issues, the chapter focuses on developments in the UK though references to similar developments elsewhere are made. In the UK graduate employment outcomes are a key policy concern. The recent government review Securing a sustainable future for higher education (BIS 2010), also known as the Browne Review recommended the removal of the cap on tuition fees; a recommendation subsequently adopted by the government ,. In the context of students having to pay to study, Browne argued that students would and should pay these fees if they provided the pathway into good jobs, or at least jobs appropriate for graduates and that the anticipated employment outcomes would shape the differences in the level of tuition fees set by institutions: the ‘charge’ for a university course “will become an indicator of its ability to deliver – students will only pay higher charges if there is a proven path to higher earnings”, Browne argued (p.31). As a consequence, it was assumed that this link between employment outcomes and institutional receipt of fees would also affect pedagogy in higher education, stating optimistically that if students are clearly informed about employment outcomes “the gap between the skills taught by the higher education system and what employers need” (p.31) would be closed, in a virtuous aligning of inputs (fees), process (pedagogy) and outcomes (jobs). In practice, this alignment is not so straightforward. Focusing on graduate transitions into employment, the types of jobs in which graduates are employed and the pay of those jobs, this chapter highlights the more complex situation empirically in which motivations and outcomes are more varied and less predictable. It also indicates the complexity of another graduate employment dynamic – the shaping of social mobility. This chapter draws on a range of secondary material, much of it conducted by staff at the Warwick Institute for Employment Research (IER) over the last thirty years, including several longitudinal studies of students and graduates – the Futuretrack studies. This chapter draws on mainly UK based research undertaken variously by its authors, and supplemented by secondary material from other researchers. The first section examines the transition of graduates to employment and highlights the radical changes that have taken place over the past fifteen years. This section extends its coverage to include a brief international perspective on the employment outcomes of UK educated graduates. The following section analyses the jobs in which graduates are employed and again, indicates the changes in the pattern of that employment. It is followed by a discussion about the changes in the occupations. The third section identifies the role of educational credentials in salary outcomes and examines whether students’ enhanced expectation about employability is materialising into graduates having higher paying jobs. The final main section discusses the diversity both of students and their distribution within HEIs, its implications for the employment of graduates and how this employment shapes the various possible trajectories of social mobility – downward as well as upward. Signals for future research issues and agendas both for researchers and for policy makers are identified in the conclusion