Education & Family

London workforce now 60% graduates

London skyline
Image caption The number of graduates in London towers over the rest of the UK

Inner London has a working-age population in which 60% have degrees, much higher than anywhere else in the UK, according to figures from the Office for National Statistics.

But there has been a sharp increase in the number of recent graduates working in non-graduate jobs, says the study.

Despite this, the official figures show graduates still earn higher pay.

The proportion of working-age adults in the UK with a degree has more than doubled in two decades - rising to 38%.

This analysis from the Office for National Statistics (ONS) shows the changing face of the UK's workforce, with a major long-term shift towards a higher proportion of graduates in the working-age population.

Rising qualifications

There are now 12 million graduates - compared with three million people who left school without any qualifications, 6.6 million whose highest qualifications are five good GCSEs or equivalents and 6.7 million whose highest qualifications are A-levels.

But this has been a very uneven increase, with the 14 boroughs of inner London having many more graduates than other parts of the country.

With 60% of the working population with degrees, it is the only place where the survey found graduates were in a majority, showing how different its workforce is from the rest of the country.

And it shows how much the capital has become a graduate economy.

London's graduate population is more than twice as high as the proportion in the north-east of England, where 29% have degrees. In Wales, the figure is 33% and 41% in Scotland.

The statistics for unemployed graduates also suggest what could be pushing this polarising economy, with the north-east of England having relatively high levels of older graduates without jobs.

The big picture of the survey shows the relentless rise in graduate numbers. In 1992, only 15% of people had degrees, by 2013 this had reached 38%.

Despite this expansion in graduate numbers, the ONS study emphasises that there are still clear economic advantages in having a degree rather than leaving education at a lower level.

Unemployment remains consistently lower among graduates and rates of pay remain considerably higher.

Lack of graduate jobs

But among recent graduates there has been a sharp increase in graduates taking non-graduate jobs, particularly since the recession in 2008, rising to 47%.

However the ONS analysis highlights that these years saw a spike in overall youth unemployment and that graduates were much less likely to be out of work than non-graduates, suggesting that those with lower qualifications were more likely to be pushed out of the labour market.

Over the longer term, the ONS figures show that five years after graduation there are much lower levels of graduates in non-graduate jobs.

Unemployment and earnings are shown to be directly linked to levels of education - with the higher the level of education achieved, the higher the rate of pay and the lower the risk of unemployment.

There were differences in earnings depending on the type of university attended. Graduates from prestigious Russell Group universities earn more on average than those with degrees from other universities, measured at £3.63 extra per hour.

However the ONS study qualifies this by saying there is a strong link between degree subject and earnings - and a much higher proportion of students from Russell Group universities studied high-earning subjects, such as medicine.

There were also gender differences, with male graduates on average earning more than female graduates.

Graduates were concentrated in particular parts of the labour market - the biggest proportion, 41%, entering jobs in public administration, education and health. They outnumbered non-graduates in this sector by almost two to one.

In contrast, non-graduates were much more likely to be concentrated in areas such as hotels and catering and manufacturing.

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