Covid-19 could be a curse for graduates but a boon for universities

A post-coronavirus recession could drive higher university enrolment and enhance human capital, says Nick Hillman

April 2, 2020
University students queue
Source: iStock

The Covid-19 crisis means a huge downturn in economic activity. A few sectors are growing, as people use more technology and swap to bigger supermarket shops, but most organisations of all shapes and sizes are taking a massive hit. We seem to be heading inevitably into a deep global recession.

Sadly, if you leave education in such a period, you can face lifelong penalties. The impact tends to be twofold: the likelihood of finding and keeping a job; and how much you earn.

Longitudinal research on Britons born in March 1958 who entered the workforce in the late 1970s and early 1980s has found long-term negative effects from unemployment – including “a scar from early unemployment in the magnitude of 12 per cent to 15 per cent at age 42”.

In a summary of the available evidence, the Economic and Social Research Council confirmed that the “class of 81” “continued to feel the impact of the deep recession that coincided with their entry into the labour market”.

More recent work on the 2008-09 recession found a “crisis cohort” who “continued to face higher unemployment, lower pay and worse job prospects up to a decade later, compared [with] other young people entering work before or after the downturn”.

The effect is not just on labour market status. There are knock-on effects, for example on mental health. It has been known since at least the Great Depression of the 1930s that unemployment brings a household other challenges beyond financial problems.

So this summer’s school-leavers won’t just suffer from not having leaving proms and not being able to take their exams properly. When people with jobs are lucky to have them, those who try to make it in the labour market find it harder than ever to secure any job.

Many people assume that student numbers will fall in response to the current problems, but recessions tend to mean that people want more education because the alternatives – underemployment or unemployment – are worse, and having more skills can protect you against the economic chill winds.

So while international student numbers may be sharply down, a greater proportion of domestic school-leavers than ever before may try to enrol in higher education. Here, as in many countries, there are fewer 18-year-olds than there have been for many years, so anyone likely to benefit will find a place.

Just before the crisis really took off, the UK’s Office for Budget Responsibility increased its forecasts for new English-domiciled students by 35,000 for 2020, 36,000 for 2021 and a further 35,000 for 2022. That’s over 100,000 additional students in just the next three years. Yet, unless penal sector-wide student number controls are imposed, the official forecasts may need to go up again.

Beyond the focus on this year’s school-leavers, we also need to focus on this summer’s graduates. They too are making a key life transition – although graduation ceremonies are going the same way as school proms.

The Higher Education Policy Institute’s recent report on university careers’ services shows that more support is on offer than in the past for those looking for graduate-level work. It also found that, after 16 years of education, graduates had been expecting to find fulfilling careers. But they too now face unprecedented challenges and a lifelong hit to their careers. The emerging evidence from the Institute of Student Employers, for instance, suggests that businesses are already reducing the number of graduates they intend to recruit.

So for the same reason that more school-leavers could choose to go on to higher education, more graduates could choose to stay in higher education. As Andrew Norton of the Australian National University recently predicted: “The COVID-19 recession will at least temporarily reverse recent negative trends in the domestic postgraduate market.”

The end result may be a more highly skilled workforce at the end of the current crisis. That would at least be some kind of silver lining around the dark clouds currently facing the higher education sector and, indeed, entire nations.

Nick Hillman is the Director of the Higher Education Policy Institute

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Reader's comments (9)

Surely the failure of graduates to gain employment undermines the economic rationale behind fees. Paying £27,000+ to sign on the dole is not going to encourage anyone to invest in more education. If the sector cannot offer even basic levels of employment as a benefit, where is the motivation to sign up for this scale of personal debt?
I have sympathy for these comments - Universities must start to focus a similar effort and resource on Graduate Outcomes as they do on International Student Recruitment, recent figures from Tribal point to institutions spending ten times more on marketing than they do on their University Careers Services - this has to change if Universities are to remain attractive to potential students and society.
A great article by Nick, which builds on a LinkedIn post a week ago comparing the impact on HE enrollments of the #Covid19 Crisis & 2008 Financial Crisis. Link: I would agree with Nick’s views with the exception of Careers Support for International Students, worth £3.2billion a year to the UK & still woefully undeserved in this regard. Whilst UK recruitment may increase due to #Covid19, it is still very unclear how international recruitment will fair, on which the financial viability of UK HE Sector rests. When Gavin Williamson wrote to #OfS in Sept 2019 he said “It is critical that #internationalstudents receive a world-class experience & should be supported into #employment, in their home country or the UK. It will be critical that OfS makes public transparent data on the outcomes achieved by international students, including those studying wholly outside the UK as it does for domestic students.” I agree with the Minister it is crucial we support this year’s graduates into jobs back home & graduates for Post-Study work in the UK &/or back home 2021. Without robust metrics on International Graduate Outcomes it will be impossible for already stretched & under resourced University Careers Services. Asia Careers Group – Investing in International Futures
Fewer graduate jobs will and should lead to fewer university students. There is little evidence that the expansion of the number of graduates has lead to a better skilled workforce. Over 25% of current graduates are under employed and during a recession this tends to increase but at the expense of non graduates where unemployment rises due to their displacement by graduates.
Couldn't put it better myself, we have reached a situation where going to university is seen as the default option for many when it may not be the best choice.
Enrolments always go up during recessions. You don’t just go to university for a ‘graduate level job’, you go for an education and an experience. Maybe we’ll rediscover the joy of learning and reward it?
I must admit I am sick of the "Okay Boomer" tag, especially since I was part of the class/group of 1981 and suffered badly in terms of mental and financial health as a result. It's amazing the number of students who have no idea about how tough things were for a lot of people d uring that period. That said I also worry about the "grade inflation" curve and the lack of respected alternatives to University education, which isn't for everybody and never will be. Let's hope some (not very) common sense rules after this period finishes
If the government insists on closing courses with bad graduate salaries, there’ll be no programmes available for them to enrol on...
It's also possible that enrolment on health care-related courses could be up significantly if there's available capacity in universities for medicine, nursing, pharmacy, etc judging by how much support and encouragement the NHS and other health care workers have received during this outbreak.