Why British ethnic minorities may struggle to get well-paid graduate jobs

British ethnic minority graduates are between 5 and 15 % less likely to be employed than their white British peers six months after graduation.
There are also differences in wages for most of the ethnic minority women and black Caribbean men who do find jobs after graduation.

Three and a half years after graduation this differences in earnings for ethnic minorities, especially for women, increases – possibly indicating that ethnic minority graduates are finding it much harder to climb the career ladder than their white British peers.

The new study by the Institute for Social and Economic Research has looked into data from the Destination of Leavers of Higher Education (DLHE), a rich dataset on graduates in the UK, for the first-ever comparison of how university choices, parental background and social class impact on ethnic minorities in terms of their chances of finding employment and their earnings both six months and three and half years after graduation.
Researchers found that ethnic minority graduates are less likely to be employed than white British graduates from a similar socio-economic background, who grew up in an area with similar opportunities and who have similar qualifications.

Most ethnic minority groups in Britain are highly educated on average and more likely to attend university than white British people. However, the study by researchers Wouter Zwysen and Simonetta Longhi at the Institute for Social and Economic Research at the University of Essex, has found that ethnic minority graduates are finding the transition from education to work harder and are especially less likely to find employment soon after graduation.

They found that early graduate unemployment is associated with earning 20-25% less later on than those that were employed right after graduation. Despite their on average high qualifications, ethnic penalties persist on the labour market.

The researchers compared ethnic minority graduates to their white British peers who graduated with similar qualifications in terms of grade, quality of university and degree; and also those who grew up in similar areas with the same local opportunities and parental background. These factors actually appear to matter very little for employment while some of the earning differences are due to ethnic minority graduates of some groups graduating with lower grades or from different universities.

The variations among ethnic minority groups are substantial and the gaps tend to be larger for women than men. Right after graduation, Pakistani, Bangladeshi and Chinese graduates are least likely to be employed (10-15%. less likely than white British) while the latter are not at a disadvantage after three and a half years after graduation. In terms of earnings, black Caribbean, Pakistani and Bangladeshi women are most at a disadvantage and earn 3-7% less than white British of similar backgrounds and similar qualifications. Three and a half years after graduation these gaps have increased to earning almost 10% less.

Three and a half years after graduation ethnic minority female graduates – with the exception of Chinese and Indian graduates – are earning 12-15% less than white British graduates, while black Caribbean and black African male graduates earn 19 and 12% less than white British graduates.”

The authors point out that these low average earning gaps can mask substantial variation. They find that when comparing graduates from low parental socio-economic background and with a small and low educated co-ethnic community as a support network most ethnic minorities earn less than their peers. On the other hand, ethnic minority graduates from high parental class background and with access to a large and highly educated co-ethnic community have similar, if not higher, wages than their white British counterparts.

Wouter Zwysen said: This supports the idea that, especially for ethnic minorities, the information and resources available in the community can provide support in finding good jobs. It also points towards the fact that even among graduates ethnic minorities experience disadvantage and if they lack the right networks they may have fewer chances compared to similar white British.

Additional resources could be given to these vulnerable groups through employability programmes or guidance. If ethnic minority graduates lack the contacts to find good first jobs, job centres and universities could provide additional guidance with initial job search and help establish contacts with employers.”

Read the full paper here –ISER Working Paper Series 2016-02 Labour market disadvantage of ethnic minority British graduates: university choice, parental background or neighbourhood? by Wouter Zwysen and Simonetta Longhi. Published Jan 2016


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