Graduates improve their own career prospects by relocating, but exacerbate geographical inequality in skills

Brain drain from the North and coastal areas as graduates relocate to areas that offer better labour market opportunities 

By age 27, graduates are 10 percentage points more likely to have moved away from the area where they grew up than otherwise similar non-graduates.

Graduates who move tend to move to London and other affluent cities and experience large gains in earnings.

This suggests that higher education enables graduates to move to places with better career prospects, and better labour market opportunities – but this leads to a brain drain from the North and coastal areas. 

However, patterns of graduate mobility exacerbate geographical inequalities in skills. Cities like London, Bristol and Brighton, which already produce large numbers of graduates, further gain graduates through migration. Conversely, there is brain drain from the North and coastal areas, which already produce low numbers of graduates.

•  For example, only 19% of those who grow up in Grimsby get degrees. But many graduates leave, so that by age 27, only 12% of the same cohorts living in Grimsby have degrees. 
• In contrast, 35% of those who grow up in London get degrees. Even more graduates move to London, so that 44% of the same cohorts living in London at age 27 are graduates.
• The 10 areas with the highest net loss of graduates, as a share of those who get degrees, are given in the table below:

These are among the findings of a new report by IFS researchers, funded by the Department for Education. It uses linked administrative school, university and tax records for all pupils who were born in the late 1980s and completed their GCSEs in England between 2002 and 2005.

The tax records include new data on where people live during their working lives, which for the first time allows us to get a detailed picture of how geographical mobility varies by education, socio-economic background and ethnicity.

The report finds that patterns of mobility, and the relationship between higher education and mobility, vary across demographic groups:

• Ethnic minorities and those from lower socio-economic backgrounds are less likely to move, and the effect of higher education on mobility is much weaker for these groups. All else equal, young people from the poorest families are only 4 percentage points more likely to move if they graduate from university. Black and Asian graduates are no more mobile than otherwise similar non-graduates.
• Of those who do move, graduates from poorer backgrounds are less likely to move to major cities than those from wealthier backgrounds. Graduates who move from the poorest fifth of families are more than 7 percentage points less likely to move to cities than those from the richest fifth; even controlling for differences in background characteristics, a gap of more than 3 percentage points remains.
• Men gain more from moving. On average, male graduates who move earn 10% more at age 27 than otherwise similar male graduates who don’t move. For women, the estimated gain is 4%.

The report also finds that gains from moving differ across degree subjects. Moving is associated with very large gains among law, technology, languages, business and economics graduates – particularly for those who move to London. Moving to certain areas may be necessary to realise the full financial gain from some degrees.

Xiaowei Xu, a Senior Research Economist at the IFS and an author of the report, said:

‘In moving from more deprived areas to London and other cities, graduates improve their own career prospects, but this exacerbates geographical inequality in skills.

“As well as ‘levelling up’ educational attainment across the country, policymakers should think about how to attract and retain talent in places that are currently less well-off.’

Ben Waltmann, a Senior Research Economist at the IFS and an author of the report, said:

‘Graduates from more deprived backgrounds are less likely to move and less likely to move to high wage areas like London, even though their gains from moving appear to be quite high. This suggests that reducing barriers to geographical mobility of such graduates could be an important way to improve their labour market outcomes and hence boost social mobility.’

London calling? Higher education, geographical mobility and early-career earnings is a report by the Institute for Fiscal Studies for the Department for Education and is authored by Jack Britton, Laura van der Erve, Ben Waltmann and Xiaowei Xu (all IFS).

Higher education, geographical mobility and early-career earnings

Analysis of the impact of geographical mobility on the earnings returns to higher education by different background characteristics.