Graduate unemployment rate lowest since 1989: recession fears drive graduates into further study


  • Graduate unemployment rate drops to 5.3%
  • Sharp rise in students taking postgraduate courses
  • Large falls in graduates entering teaching, medicine and engineering


A robust graduate jobs market combined with a sharp rise in students taking postgraduate courses has led to the lowest graduate unemployment rate since 1989.


Prospects “What do graduates do?” report analyses the destinations of last year’s graduates, six months after leaving university. It reported a fall in the graduate unemployment rate to 5.3% from 5.7% in 2016. Only three years in the last 40 has the UK experienced lower levels. The employment rate for graduates also fell, from 76% to 74%.



The reason both employment and unemployment rates fell is due to a sharp rise in graduates entering further study. Increasing from 13% to 16% this year – 39,135 graduates entered further study, up from 32,385 last year.


While the UK is currently not in recession, increasing numbers of graduates going into further study are historically linked to economic downturn, as demonstrated in the last three major downturns1.


“What do graduates do?” also shows that while there were large rises in graduates entering nursing, marketing, finance and IT, there were significant falls in the number of graduates working in medicine, teaching and engineering, reflecting the decreasing number of students studying those subjects. Despite many industries such as these having a shortage of workers, this did not translate into higher graduate starting salaries, which remained flat at an average of around £21,000.  


Charlie Ball, Head of Higher Education Intelligence at Prospects said:


“The graduate labour market has held up well despite the economic and political shocks of 2016. Employers continue to recruit and need skilled workers, but some graduates are not behaving as they usually do in this kind of climate, they’re turning to further study. This may be partly attributed to the new postgraduate loans system, but some graduates could also view further study as a safe haven, away from their fears of a Brexit downturn, which has yet to materialise. As a consequence, we have fewer graduates entering the jobs market than in the last two years, just when the labour market is robust and skills shortages are more serious than ever.”


“What do graduates do?” is written in partnership with the Association of Graduate Careers Advisory Services (AGCAS). AGCAS President Shelagh Green commented:


“Along with Higher Education Careers Services, the annual What do graduates do? data is a valuable source of information for current students as they plan for their futures. The constantly changing nature of the graduate labour market and the global economy makes it essential for today’s students to embrace the opportunities and support available.”


Jane Howie, Chair of the AGCAS Education Liaison Task Group commented:


“What do graduates do? focuses on topical issues including entrepreneurship, social mobility and apprenticeships. Content is relevant not only to students, graduates and careers and employability practitioners, but also to wider stakeholders including academics and colleagues in student recruitment and employer engagement.”



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