In 2020–21, the total number of hours worked by young people aged
16–24 fell by more than a fifth from 2019–20, a drop of over a
billion hours. Evidence from previous recessions tells us that
young people who graduate during an economic downturn tend to
suffer worse career outcomes that take several years to recover
from.
Yet, remarkably, new IFS research finds no evidence of
persistent negative effects on employment rates or job
quality for cohorts that graduated during or just before
the pandemic, compared with earlier cohorts. This is in
stark contrast to the global financial crisis,
when new graduates saw lower employment rates, slower
occupational progression and worse job quality.
The research found that:
-
The cohort that graduated in 2020, particularly those
with university degrees, initially experienced worse
outcomes. They struggled to find work immediately
after graduation and were less likely to receive on-the-job
training, and those with degrees started in lower-paid
occupations than previous cohorts.
-
However, the rapid economic recovery and boom in jobs
vacancies allowed them to quickly recover lost ground.
One to two years into their careers, they do not appear to have
lower employment rates or worse job quality than previous
cohorts.
-
The cohorts that entered the labour market in 2019 and
2021 fared no worse than previous cohorts across a number of
job quality measures. Up to one year after graduation
(and up to two years for the 2019 cohort), they were no less
likely to be in full-time, permanent jobs, to work in high-paid
or professional occupations, to receive on-the-job training, or
to work for a large firm.
- There were no significant differences by parental
background on these measures of job quality – perhaps
surprising given the lack of formal internships over the
pandemic.
The fact that the pandemic cohorts have not fared worse than the
cohorts preceding them does not, of course, mean that their
prospects are rosy – even before the pandemic, young people were
seeing their earnings stagnate, and they (like all workers) are
now facing a squeeze on real earnings as a result of inflation.
It may also be that some negative effects on the pandemic cohorts
are yet to materialise. As the labour market becomes less tight,
their loss of work experience and training over the pandemic may
put them at a disadvantage.
Perhaps more concerning still are the prospects for the next two
cohorts of graduates, who face a double whammy of having had
their last years of education disrupted by the pandemic, and
being set to enter the labour market in a prolonged recession.
Sam Ray-Chaudhuri, a Research Economist at IFS and an
author of the report, said:
‘Despite the enormous amount of time spent not working by young
people during the pandemic, the job outcomes of those graduating
between 2019 and 2021 appear to be at least as good as those of
previous cohorts. This surprising finding seems to be a result of
the exceptionally tight labour market during this period. A lack
of training or experience could harm these graduates in the
future, however, and those about to graduate may be particularly
vulnerable as the labour market cools.’
ENDS
Notes to Editors
‘Are the kids alright? The early careers of education leavers
since the COVID-19 pandemic’ is an IFS report by Sam
Ray-Chaudhuri and Xiaowei Xu
