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HE leavers and the labour market: some lessons from LEO

  • 15 June 2017
  • By Diana Beech

After the trials and tribulations of the past week, the release of the Longitudinal Education Outcomes (LEO) data on Tuesday at least provided the higher education sector with a welcome sense of ‘business as usual’.

For those unfamiliar with the LEO data, these are experimental statistics on the employment and earnings of higher education graduates in the UK, arrived at by bringing together data on education, tax and benefits from three government departments. By pooling this knowledge together, we now have an insight into the employment and earnings outcomes of graduates at different stages after completing their higher education courses – namely one, three and five years after graduation.

The dataset released this month focuses on the employment and earnings outcomes in the tax year 2014-15 and, therefore, covers graduates who received their undergraduate degrees in the academic years 2008-9, 2010-11 and 2012-13. This data is broken down both by 23 different subject areas and the higher education institutions attended, as well as by other more traditional demographic categories, such as gender, age and ethnicity.

Despite having previously been criticised for their limitations – such as excluding the self-employed or those who work abroad, and ignoring the personal sense of satisfaction that comes from working in the public or charity sectors – the LEO data have become a tool by which to measure the value for money of different university degrees. And with the Labour pledge to abolish tuition fees believed to be a real game-changer in last week’s General Election, the sector certainly needs all the tools it can get to prove tuition fees are equitable and present real value for money going forwards into a world where university fees are set to rise in line with inflation.

The latest HEPI-HEA 2017 Student Academic Experience Survey, which looks at the higher education experiences of over 14,000 full-time undergraduates, shows that perceptions of value for money of a UK higher education are falling, with declining perceptions of value evident in England, Northern Ireland and most markedly in Scotland. With nearly as many students today (34%) believing they are receiving poor value for money from their higher education, as compared to those that think they are receiving good value (35%), many may well look to the LEO data to allay or confirm their fears and, ultimately, influence their decision whether to embark on a university degree.

In many ways, this month’s LEO data contains no surprises. The lowest median salary across all subjects five years after graduation can be seen to be in the Creative Arts at around £20,000, which is roughly similar to the median salary for all 25-29 year olds in work that year anyway. That means, overall, the vast majority of degrees boosted graduates’ median earnings potential, with the highest earnings potential experienced in STEM (Science, Technology, Engineering and Maths) disciplines. Similarly, the median proportion of graduates in sustained employment five years after graduation was firmly within a ten point range (75-85%) across all the subject areas, showing graduate job prospects are positive.

Every rose has its thorn, however, and unfortunately this one is out to injure women. The data show that for all subjects except English Studies, male median earnings exceeded female median earnings at more than half of institutions. Male earnings were also greater than female earnings in 12 subject areas at more than 75% of institutions, proving employers still have some way to go to close the gender pay gap in our businesses and industry.

As for the impact that this latest tranche of LEO data could have on policy, there are lessons to be taken by all the major stakeholders:

  • Universities might consider using the LEO data in conjunction with the forthcoming Teaching Excellence Framework (TEF) results on their websites to help clarify the value for money of their courses to prospective students. For universities in areas where the data are unconvincing, such as in the Creative Arts, efforts could be made to emphasise the non-monetary gains that are to be had from these degrees, including personal satisfaction levels, societal impact and personal development, to offset any potential damage.
  • Employers should concentrate efforts on reducing the gender pay gap and ensuring equity of pay across different grades. Pay reviews should be encouraged in light of this data for graduate jobs to improve results over the coming years.
  • Government would do well to develop the LEO data to better reflect the needs of a post-Brexit Britain, in which ‘upskilling’ adult learners to meet the needs of the UK economy will be just as important as preparing 18-year-olds for the world of work. The Government should therefore consider LEO’s utility for mature, part-time and distance learners. Developing this dataset with the needs of the part-time sector in mind could also be one way to boost perceptions of value for money from those retraining for other jobs or actively seeking to progress in the labour market.





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