1. GRADUATE UNEMPLOYMENT POLICY
Researched and Produced by:
Colm Fahey
Research and Policy Officer
UCD Students’ Union
Email: research@ucdsu.ie
Ph: 01 716 3180
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2. GRADUATE UNEMPLOYMENT POLICY
Extent of Graduate Unemployment...........................................................................Page 3
Cost to the State of Graduate Unemployment...........................................................Page 5
Consequences of Graduate Unemployment...............................................................Page 6
Policy Suggestions.......................................................................................................Page 7
Extent of Graduate Unemployment
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3. GRADUATE UNEMPLOYMENT POLICY
One in five unemployed people are third level graduates1
. This is the fourth highest rate of graduate
unemployment in the twenty seven countries of the European Union2
. There are now 59,400
unemployed graduates. The number of unemployed graduates is now so large that they would not
be able to fit into the new Lansdowne Road Stadium3
.
Graduate unemployment has increased by almost 500% since the start of the century4
. For every
graduate who was unemployed at the start of the century, five are now unemployed.
Irish graduates are being affected by the recession far worse than their European counterparts.
There are now 13,700 less graduates employed in Ireland5
. Irish graduate unemployment is now one
third higher than the EU average6
. For every three graduates who are unemployed in the EU as a
whole; four are unemployed in Ireland7
. For every 100 graduates who are unemployed in the UK;
175 are unemployed in Ireland8
.
In the past six years:
Irish graduate unemployment has increased 22 times faster than the Eurozone average9
.
Irish graduate unemployment has increased 16 times faster than the EU average10
.
Graduate unemployment in Ireland peaked in late 2009 and has fallen since then11
. This provides
evidence of a brain drain. Graduates are emigrating. Ireland is receiving nothing in return for the
money that has been spent educating these graduates.
1
Quarterly National Household Survey (QNHS) Q1 2010 shows that 275,000 people are unemployed and that
59,400 of these have third level qualifications.
2
Eurostat data shows that the highest rates are Slovakia 31%; Cyprus 31%; Luxemburg 30%; Ireland 22%
3
Capacity of the Aviva Stadium is 50,000
4
Eurostat data shows that 1.6% of graduates were unemployed in Q1 2000 and 7.2% of graduates are
unemployed in Q1 2010
5
QNHS shows graduate employment at 748,000 in Q1 2010 and at 761,700 in Q4 2008
6
The most recently available Eurostat data shows that 7.2% of Irish graduates are unemployed whereas 5.4%
of EU graduates are unemployed
7
After adjusting for population
8
After adjusting for population; Eurostat data shows that UK graduate unemployment is 4.1% whereas Irish
graduate unemployment is 7.2%
9
Eurostat data shows Irish graduate unemployment was 2.7% in Q3 2002 and 7% in Q4 2009. EU graduate
unemployment was 5.4% and 5.8% for these quarters. These quarters are the earliest and most recent data
available for Eurozone graduate unemployment
10
In the same quarters as above, Eurostat data shows that EU graduate unemployment was 4.9% and 5.4%
11
Graduate unemployment was 7.9% in Q3 2009 but fell to 7.2% by Q1 2010.
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4. GRADUATE UNEMPLOYMENT POLICY
The proportion of graduates who are employed overseas doubled in 200812
. The data for 2009 is not
yet available. However, all the available data suggests that it is likely to be shocking.
The number of graduates in the country increased by over 50,000 every year since 2005. However,
this year the number of graduates in the country only increased by 15,00013
. This suggests that for
every ten new graduates that stayed in the country from the class of 2008, only three new graduates
stayed in the country from the class of 2009. This provides very strong evidence that new graduates
are simply leaving the country. There are now 4,200 fewer graduates in the country14
.
Graduates are suffering more from the recession because companies have stopped hiring. This
makes it very difficult for graduates to get their first job.
Cost to the State of Graduate Unemployment
It costs the State €155,000 to put a dentistry student through college. The State will never get a
return on this money if the student emigrates. If the graduate is unemployed it costs the state a
further €11,000 per year in dole payments.
12
Higher Education Authority (“What do graduates do” publication) shows that 4.1% of 2007 graduates were
employed overseas nine months after graduating whereas the corresponding figure for 2008 graduates was
8.5%. The figures for Honours Batchelor Degree graduates are 9.8% in 2007 and 14.7% in 2008.
13
QNHS shows the number of persons aged 15 – 64 with third level qualifications (not just in the labour force)
in the first quarter of the year is as follows: 2010: 932.9; 2009: 917.7; 2008: 863.8; 2007: 811.2; 2006: 759.7;
2005: 691.3
14
QNHS show there were 937,100 graduates in Q3 2009 but only 932,900 in Q1 2010. This is the total number
of persons aged 15 – 64 with third level qualifications. It is not the number of persons in the labour force.
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5. GRADUATE UNEMPLOYMENT POLICY
The table below shows the annual cost of educating a student. This money is wasted if graduates
emigrate. They will pay their taxes in a different country and the Irish Government will never recoup
the money invested in them.
Consequences of Graduate Unemployment
Research15
shows that unemployment has serious long term consequences for young people.
Remarkably, if a person is unemployed in their early twenties it still has a serious effect on them
when they are in their forties. However, if a person is unemployed for the first time in their thirties,
it has no effect whatsoever on them in their forties.
15
http://www.oecd.org/dataoecd/55/13/43766462.pdf
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6. GRADUATE UNEMPLOYMENT POLICY
Research very clearly shows that people who were unemployed in their early twenties suffer from
worse health, less job satisfaction and lower earnings when they are aged 46. The same research
shows that this is not the case with people who become unemployed for the first time in their
thirties. The research concludes that unemployment while young causes permanent scars whereas
unemployment among older people merely causes temporary blemishes.
A period of unemployment while young massively increases the likelihood of:
• Worse health in the future
• Less job satisfaction in the future
• Lower earnings in the future
• Malnutrition
• Depression
• Suicide
• Reduced life expectancy
• Heart attack in later life
• Unemployment again in the future
The unemployed are four times more likely to suffer from a mental illness. The author of the
research summarises his findings by saying: “A spell of unemployment when young continues to have
a harmful impact in later life. Youth unemployment is harmful and needs to be avoided.”
Put frankly, if young people are unemployed it will haunt them for the rest of their lives. This is why
graduate and youth unemployment should be prioritised. It has far more severe consequences that
unemployment generally.
Policy Recommendations
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7. GRADUATE UNEMPLOYMENT POLICY
A Work Placement Programme was introduced in April 2009 to provide work experience to
graduates. Graduates are entitled to keep their social welfare payments while taking part in this
scheme. This programme provides an ideal platform to build from to tackle the problem of graduate
unemployment. However, we suggest wide ranging changes to the programme:
• Remove the bureaucracy: Less than 700 graduates have taken part in this scheme in its first
fourteen months16
. This is less than 1% of unemployed graduates17
. Clearly, FÁS isn’t capable
of running this program. 99% of unemployed graduates are being ignored. Graduates are
crying out for work experience but only a handful of successful applications are being
processed. FÁS need to be taken out of the equation. The middle man needs to be cut out.
Businesses and graduates should be able to deal directly with each other through a website
that operates identically to www.jobs.ie
• Increase eligibility for graduates: At present, a graduate must be unemployed for three
months to be eligible for this program. This makes no sense. Graduates will emigrate rather
than waste three months on the dole. All unemployed graduates should be eligible for the
program.
• Awareness campaign: The success of the program will be very limited unless there is
widespread knowledge of it. Graduates need to know that it is possible to gain work
experience in Ireland during the recession. Businesses need to know that they can benefit
from talented graduates to help them through the recession.
• Allow payments for expenses: There are expenses involved in working. Businesses should
be allowed to top up the social welfare benefits of participants to cover the cost of
travelling, food etc. They should also be allowed to pay a small sum, which can be capped by
legislation, to the graduates in recognition of their work. Businesses should not be forced to
pay employer’s PRSI because of making these payments.
• Open up the public sector: It makes no sense that many public services remain understaffed
while qualified highly skilled workers remain on the dole. Nurses and physiotherapists wait
in a dole queue while those needing their services suffer on waiting lists. Graduates should
be allowed to work as teaching interns in schools, nurses in hospital and administrators in
local authorities and Government Departments. Thousands of positions remain unfilled in
16
http://www.kildarestreet.com/wrans/?id=2010-07-08.3209.0
17
QNHS Q1 2010 shows that 59,400 graduates are unemployed
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8. GRADUATE UNEMPLOYMENT POLICY
the public sector as a result of the recruitment moratorium. Allowing graduates to fill these
vacancies is a win-win situation.
This program benefits everybody. Graduates are gaining badly needed experience while businesses
are benefiting from talented graduates to help them through the recession and the public sector is
able to cope with the moratorium on recruitment. The cost to the Government would be tiny. These
graduates are already claiming the dole. The only Government expenditure that is required is the
funding of an awareness programme.
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