Pandemic graduates set to be no worse off than predecessors, research suggests

A new report by the Institute for Fiscal Studies (IFS) has suggested that in 2020-21 the number of hours worked by those between 16 and 24 fell by more than a fifth from the previous year.

Researchers said that evidence from previous recessions show that young people who graduate during a time of economic downturn tend to suffer from worse career outcomes that often take years to recover from.

However, the think-tank found that there was no evidence of a link of persistent negative effects on employment rates or job quality for the pandemic generation of graduates compared to previous cohorts.

“This is in stark contrast to the global financial crisis, when new graduates saw lower employment rates, slower occupational progression and worse job quality,” researchers noted.

The research found that of those who graduated in 2020, especially those with university degrees, many experienced worse outcomes by struggling to find work after graduation, receiving less training on the job, and in lower paid positions than their predecessors.

Yet the rapid recovery of the economy, in particular the number of job vacancies, allowed this generation to recover lost ground and now, one or two years into their careers, do not appear to have missed.

There were also no significant differences in parental background on the measures of job quality which the researchers looked at, despite the lower number of formal internships being offered during the pandemic.

Sam Ray-Chaudhuri, a Research Economist at IFS and an author of the report, said: “Despite the enormous amount of time spent not working by young people during the pandemic, the job outcomes of those graduating between 2019 and 2021 appear to be at least as good as those of previous cohorts.

“This surprising finding seems to be a result of the exceptionally tight labour market during this period.

“A lack of training or experience could harm these graduates in the future, however, and those about to graduate may be particularly vulnerable as the labour market cools.”

The report did warn that although the pandemic generation of graduates look to have not fared any worse than those who came before them, this does not mean that their prospects are “rosy”.

“Even before the pandemic, young people were seeing their earnings stagnate, and they (like all workers) are now facing a squeeze on real earnings as a result of inflation,” the report said.

It also warned that some effects from the pandemic could yet to be seen, with a loss of work experience and training over the pandemic potentially putting the cohort at a disadvantage.

“Perhaps more concerning still are the prospects for the next two cohorts of graduates, who face a double whammy of having had their last years of education disrupted by the pandemic, and being set to enter the labour market in a prolonged recession,” the researchers noted.