Under-Grads, NEETs and the Apprenticeship Levy

The Certified Institute of Personnel and Development (CIPD) considered one the leading commentators on skill development and the labour market, has just published an extensive report about the  ‘mismatch’ between graduates and the work they do.


CIPD estimates that 58% of graduates are now underemployed, doing work for which they are over qualified –even higher than previously thought and in Europe, only exceeded in Greece and Estonia. The ‘pushing down’ of graduates into non-graduate jobs is reflected in a 21% share of administrative, 13% of sales workers , but also 8% of those in unskilled ‘elementary’ occupations. As CIPD note, the UK has had one the highest increases in Higher Education participation in Europe, but at the same time one of the lowest increases in high skilled jobs.

But the report makes clear than even though graduates may experience falls in income, this doesn’t mean the gap between graduate and non-graduate pay is getting less (known as the ‘graduate premium’). On the contrary, non-graduates are pushed into jobs farther down the income scale. In otherwords it emphasises the importance of a degree as a ‘positional’ good and helps explain why despite graduate underemployment, there’ s no let-up in the number applicants for HE.

Also out are the latest ONS figures for NEETs, those 16-24 year olds Not in Education, Employment, or Training.


These show a slight fall in overall numbers, down to 922,000, but that 1 in 8 of all 16-24 year olds are in this category 1 in 7 for 18-24 year olds. The number of NEETs has fallen significantly since 2012 and has coincided with the raising of the ‘participation age’ for education and training to 17 and then 18. But the fall in numbers has levelled off more recently.

Finally, the government has also issued a consultation document about the proposed apprenticeship levy on large employers This has been designed to help pay for the 3 million more apprenticeships promised by David Cameron in the general election, but is opposed by the CBI. Regardless of the outcome, it’s not due to be implemented till 2017.


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