University graduates comprise a special subgroup of the workforce, as they accumulate high levels of human capital and can improve a region’s skills base. They can make a positive impact on regional economic growth through their increased productivity and spending power. Given that there is heightened policy interest in levelling up across the UK, particularly in light of the COVID-19 recovery planning, it is crucial to examine the mechanisms that influence the geographical mobility behaviour of higher education graduates. In this context, two recent reports by the West Midlands Regional Economic Development Institute (WMREDI) explore the interregional patterns of graduate retention and attraction according to personal (age, gender, ethnicity) and university-related characteristics (level and subject area of study, class of degree, type of university attended) of new graduate workers. The reports utilise Graduate Outcomes Survey data for the academic year 2018/19 to estimate the retention and attraction rates for the nine English regions, Wales, Scotland and Northern Ireland, for those graduates who were in employment 15 months after completing their studies.
The WMREDI studies find that London benefits disproportionately from the mobility behaviour of recent graduates. Specifically, the capital is the only region in which both the retention (74.4%) and attraction (53.7%) rates are higher than the UK average (58.1% and 41.9%, respectively). In a similar vein, of the total 2018/19 graduates who migrated to another region for work, nearly one third chose London as their destination, whereas only 15.9% moved to the northern English regions. It appears that the high living costs in the capital are outweighed by a number of pull factors, such as increased opportunities for well-paid jobs and career advancement, transport links, accessibility, amenities and culture-related determinants, which seem to maximise graduates’ utility.
Graduate attraction and retention rates by region
Note: ‘Graduate retention’ is defined as the proportion of new graduate workers employed in the region where they studied over the total number of new graduate workers that studied in that region. ‘Graduate attraction’ represents the number of new graduate workers that come from other UK regions of study relative to the total number of new graduates employed in the destination region. The bubble’s size for each region represents the total number of new workers who graduated from universities located in that region (based on the academic year 2018/19).Source: WMREDI report on Graduate pathways: Identifying patterns of regional retention and attraction using the Graduate Outcomes Survey data from HESA (Higher Education Statistics Agency), 2018/19.
When analysing the retention/ mobility behaviour by looking at specific sub-groups of graduates, the WMREDI reports reveal some intriguing results that are important for policy and may merit further research. To start with, the likelihood of staying local for employment after graduation is higher for women than for men. This could represent another reflection of gender inequality if better transregional occupation opportunities are offered to men, especially in the early stages of their careers. A second explanation may relate to the fact that a higher proportion of women access jobs in the public sector, given that such opportunities are more geographically evenly spread than private-sector jobs.
Moreover, the regional retention rates are significantly lower for younger graduate workers (aged 29 years and under) than for those over 30 years (55.3% versus 67%, respectively). The labour-motivated geographical mobility of young graduates should hinge on their increased willingness to find their job match at the beginning of their careers by pursuing opportunities across the country. On the contrary, family commitments and employment considerations of other members of dual-earning/ dual-career households might affect the migration decisions of mature graduates, thus tipping the balance in favour of choosing to stay in the same region of study for work.
The WMREDI research also finds considerable ethnic differences in the migration decisions of new graduate workers. On average, Bangladeshi (73.5%) and Pakistani (67.6%) graduates exhibit the highest retention rates in the UK regions, whereas Indian (50.6%) and Chinese (51.6%) new workers are the least likely to be employed in their region of study after graduation. Particularly noteworthy is that the Black community demonstrates impressive regional variation in the propensity to stay local. Furthermore, the movement from London to other regions differs substantially between White graduates and ethnic minorities, as the latter tend to relocate closer than their White counterparts.
The analysis results also unveil that the probability of staying in the same region of study for work after graduation decreases as we move from lower to higher segments of graduates’ skills/class of degree distribution. In particular, graduates who attended the selective Russell Group universities and demonstrated a solid academic performance exhibit lower retention rates than others. Finally, graduates with a degree in Arts, Humanities, and Education are far more likely than STEM (Science, Technology, Engineering and Mathematics) and LEM (Law, Economics and Management) graduates to stay in the same region of study for work. Conversely, regional attraction rates are generally higher among STEM graduates (standing at 46.6% on average in the UK) than those with higher education qualifications in other subject areas. This picture likely mirrors the increasing demand for specific high-level skills across regions and becomes more insightful in light of the existing skills mismatch issue at the national level.
The role of universities in graduate retention
From a policymaking viewpoint, it is imperative to align the knowledge universities offer with the need for skills, and to identify the impediments to graduate retention, particularly in regions with many skills shortages. With the rapidly changing demand for high-level skills and the advent of new technologies in specific sectors, such as automation and artificial intelligence, embracing flexible learning and novel degree structures is becoming all the more important. The role of universities in increasing the provision of such skills is vital for addressing the existing demand and supply imbalance at the national level. Higher education institutions could utilise the knowledge gained from their collaborations with local firms to enhance their degree programmes and equip their students with required skillsets, thus enhancing graduates’ employability. In an adjacent context, university-led STEM assets (such as innovation centres, science parks, incubators and accelerators) constitute good examples of how upskilling and knowledge transfer could be strengthened through partnerships with businesses operating in a region.