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Australia's graduate labour market in the wake of COVID

October 2021

In part two of this week's regular labour market update, Charlie Ball provides a top-level summary of the findings of Australia's Graduate Outcomes Survey to discover the impact of COVID, how social class and region affect outcomes, the persistent gender pay gap, and the extent to which graduates feel they're utilising their skills

You can read part one of the 12 October graduate labour market update here.

It's time for the results of the Graduate Outcomes Survey! The Australian Graduate Outcomes Survey (GOS), that is.

The GOS is completed by graduates of Australian higher education institutions approximately four to six months after finishing their studies. It's administered across three periods each year - in November of the previous year and in February and May of the current year. The May survey round is the largest, accounting for around two-thirds of responses collected.

Labour market stabilises after pandemic effect

  • The impact of the COVID-19 pandemic continued to be felt in the Australian labour market throughout the period covered by the 2021 GOS. Nonetheless, after declining between 2019 and 2020, graduate labour market outcomes stabilised somewhat in 2021.
  • Although the overall employment rate for recent graduates recorded a further slight decline, from 85.1% in 2020 to 84.8% in 2021, the full-time graduate employment rate increased slightly, from 68.7% to 68.9%.
  • A sharp decline in employment rates is evident between November 2019 and November 2020. Full-time employment fell from 68.0% to 60.6%, while overall employment fell from 84.8% to 81.5%. This reflects the severe disruption to social and economic activity in mid to late 2020 caused by measures taken to protect public health.
  • Results for the February round are mixed, with the overall employment rate declining but the full-time employment rate improving slightly, compared to results from the February 2020 survey round.
  • For the May rounds, however, there was a clear improvement in graduate employment between 2020 and 2021. Full-time employment rates rose from 69.0% to 72.1%, close to the level recorded in May 2019. Overall employment rose from 85.4% to 86.2%, still one percentage point lower than in 2019. These are the most recent survey results, corresponding to a time when the Australian economy was relatively unaffected by COVID related health measures.
  • The average number of actual hours worked by employed graduates dipped markedly in the May 2020 survey round due to COVID-19 restrictions. This was a short-lived downturn, however, with hours worked returning to pre-COVID levels from the November round of the 2021 GOS.

Beyond subject choice, the gender gap in median graduate salaries persists due to a range of other factors such as occupation, age, experience, personal factors, and possible inequalities within workplaces.

Variations by region and socio-economic status

  • In 2021, graduates from higher socio-economic status (SES) categories performed better in most employment areas, with 70.0% of high SES undergraduates employed full-time compared with 68.7% of those in medium SES and 67.6% in the low SES category.
  • The pattern is similar in terms of overall employment, with high, medium and low SES graduates recording overall employment rates of 85.7, 85.0 and 82.6% respectively. This pattern differs for labour force participation, with 92.3% of medium SES undergraduates participating in the labour force compared to 92.1% and 91.4% for high or low SES undergraduates respectively. It's nice to know it's not just the UK that sees class effects.
  • Full-time and overall employment rates of undergraduates from regional or remote areas remained higher than for those from metropolitan areas. Regional/remote graduates' full-time employment rate was 74.3% compared with 67.5% for metropolitan graduates, a difference of 6.8 percentage points. Similarly, 87.4% of regional/remote graduates were employed overall, compared with 84.2% for metropolitan areas.
  • Those in regional/remote areas were slightly less likely to participate in the labour force, with a participation rate of 91.5% compared with 92.2% for metropolitan areas. I'd like to see examinations like this for the UK.

The immediate gender pay gap

There is a gender gap in undergraduate salaries immediately upon graduation. It can be explained, in part, by the fact that females are more likely to graduate from study areas which receive lower levels of remuneration. However, it is also the case that at the undergraduate level, females earn less overall than their male counterparts within most study areas. The study areas which exhibit the highest gaps between male and female salaries include:

  • psychology with a gap of $6,900
  • architecture and built environment $5,200
  • law and paralegal studies $4,900
  • health services and support $4,800
  • agriculture and environmental studies $4,700.

Medicine, rehabilitation, pharmacy and engineering were the exceptions where female undergraduate median salaries are higher than or equal to their male counterparts. This demonstrates that beyond subject choice, the gender gap in median graduate salaries persists due to a range of other factors such as occupation, age, experience, personal factors, and possible inequalities within workplaces.

The proportion of undergraduates in full-time employment who reported that their course had prepared them well or very well for their current job was lower at 74.4% compared to 78.5% in 2020.

Preparedness for work falls

In 2021, the proportion of employed undergraduates seeking more hours of work, that is, underemployed part-time workers, was 19.3% which is lower than the 21.8% reported in 2020 and more in line with figures of 19.8% in 2019 and 19.2% in 2018.

The main reasons that undergraduates were underemployed part-time workers in 2021 were because there were no more hours available in their current position, 41.2%, they were studying, 15.8%, because there were no suitable jobs in my local area, 4.5%, or because there were no jobs with a suitable number of hours, 4.4%.

In 2021, four months after graduation, 67.8% of undergraduates employed full-time were working in managerial or professional occupations which was lower than the 69.5% reported in 2020, 69.9% reported in 2019, and 72.1% reported in 2018.

The proportion of undergraduates in full-time employment who reported that their course had prepared them well or very well for their current job was lower at 74.4% compared to 78.5% in 2020 and 77.1% in 2019. The proportion for employed graduates showed a similar trend with 65.0% in 2021, which is lower than the 69.2% in 2020 and 68.6% in 2019.

In 2021, 29.3% of undergraduates employed full-time indicated they were working in a job that did not allow them to fully use their skills or education, up from 28.1% in 2020, 28.3% in 2019, and 27.1% in 2018.

25.0% of undergraduates who reported they were not fully utilising their skills or education in 2021, stated that this was because of personal factors, while around two thirds, 63.1% indicated it was due to labour market factors.

More specifically, the main reason reported by undergraduates for working in a job not fully utilising their skills or education was that they are currently in an entry level job/career stepping stone, 26.2%. This was followed by:

  • not enough work experience, 12.8%
  • satisfied with current job, 11.0%
  • no suitable jobs in my area of expertise, 10.2%.

Graduates employed part time were more likely to state that they did not use their skills or education in their current job because they were engaging in further study with 22.3% of all employed graduates stating this reason in comparison with 7.4 % of graduates employed full time.

This is a big and interesting survey that tells us that perhaps some of the issues we face in the UK graduate labour market are not so different from other experiences after all.

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