42% of university-educated workers outside London work in a job
that does not require a degree, up from 31% in 1993. The share is
highest in Lincolnshire and Cumbria, where more than half of
graduates work in non-graduate jobs (58% and 52%, respectively).
These are among the findings of a new IFS report that examines
the geographical implications of long-term trends in the labour
market, building on previous research for the IFS Deaton
Review of Inequalities.
It finds that the national decline in traditionally middle-paying
occupations, and the relative rise in both low- and high-paying
occupations – often referred to as ‘hollowing out’ – has played
out very differently across the country:
- The occupations that have grown most since 1993 are either in
low-paid services such as social care, childcare and hospitality,
or in high-paid services such as IT, business and finance.
But whilst the low-paid service jobs have grown
everywhere, the new ‘high-end’ jobs mainly emerged in
London.
- Employment in high-paying occupations has grown by 95%
nationally since 1993. But the growth was 240% in Inner London
and just 41% in Cheshire.
- Meanwhile, the number of graduates expanded evenly across the
country. With graduate numbers rising everywhere but graduate
jobs increasingly concentrated in London, this means that
many graduates in other parts of the country are unable
to fully capitalise on their education.
-
Previous
research shows that graduates from poorer
family backgrounds are much less likely to move to
London. This group – who have invested in higher
education but don’t tend to move – are perhaps the most
negatively affected by long-term labour market trends.
- The share of graduates in non-graduate jobs in London
remained fairly stable over the last three decades (at 37%–38%),
but rose virtually everywhere else. This is consistent with
other
research showing a fall in the graduate wage premium
outside London.
Whilst high-skilled workers benefit strongly from being
in London, some low-skilled workers in London may see their
career progression hampered. In London, people in
elementary occupations such as cleaners, security guards and
kitchen staff are more likely to work in specialist agency firms
that only contain low-skilled jobs.
Xiaowei Xu, a Senior Research Economist at IFS and the
author of the research, said:
‘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. 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.’
