Chasing Graduate Jobs

This paper examines empirically the relationship between under-employment and
migration amongst five cohorts of graduates of Scottish higher education institutions
with micro-data collected by the Higher Education Statistical Agency. The data
indicate that there is a strong positive relationship between migration and graduate
employment—those graduates who move after graduation from Scotland to the rest of
the UK or abroad have a much higher rate of graduate employment. Versions of
probit regression are used to estimate migration and graduate employment equations
in order to explore the nature of this relationship further. These equations confirm that
there is a strong positive relationship between the probability of migrating and the
probability of being in graduate employment even after other factors are controlled for.
Instrumental variables estimation is used to examine the causal nature of the
relationship by attempting to deal with the potential endogeneity of migration
decisions. Overall the analysis is consistent with the hypotheses that a sizeable
fraction of higher education graduates are leaving Scotland for employment reasons.
In turn this finding suggests the over-education/under-employment nexus is a serious
problem in Scotland