Executive Summary

Attracting and retaining talent is increasingly critical for the success of city economies as the UK continues to specialise in ever more high-skilled, knowledge-intensive activities. And this is a big challenge for many of our cities. While the UK’s great universities are spread around the country, many graduates head straight for the bright lights of the capital after completing their studies.

London is not only more attractive to new graduates generally; it is especially attractive to high achievers. The capital accounts for around 19 per cent of all jobs. But six months after graduation, of the graduates who moved city, London employed 22 per cent of all working new graduates, and 38 per cent of those working new graduates with a first or upper second class degree from a Russell Group university.

Yet there is more nuance to this picture than is generally understood. Cities outside London do retain graduates – but they do not retain most of the students that move to their city to study.

Almost half of new graduates are ‘bouncers’, moving to one city to study, then leaving for another city straight after graduation. In Manchester, for example, 67 per cent of the students who went to study in the city left upon graduation. In Birmingham this figure was 76 per cent. And in Southampton it was 86 per cent. It is these people that drive the migration flows to the capital.

Setting the ‘bouncer’ cohort to one side shows that the majority of cities still experience a graduate brain gain; for two reasons. First, they attract more graduates to their city – either graduates who came to study and remain in the city for work, or who move in after graduation for work – than they lose when local people leave the city to work elsewhere as graduates.

Second, universities, to a varying degree, play an important role in cities by ‘growing their own’ – educating students who grew up in the city and who then stay in the city after graduation to work.

The patterns of graduate migration appear to be primarily driven by a mix of short- and long-term job opportunities. The fact that there is no relationship between moving graduates and wages suggests that future career opportunities play an important role in influencing where graduates move to and why.

From a policy perspective, if a city wants to attract and retain a greater number of graduates, then it needs to support economic growth, rather than rely on narrower policies specifically targeted at graduate attraction and retention. Cities should aim to support the creation of more jobs, and particularly high-skilled knowledge jobs. This would mean:

  • Boosting educational attainment to improve skills throughout the workforce
  • Putting in place good economic fundamentals that underpin successful city economies – transport, housing and planning
  • Helping to boost demand for high-skilled workers among businesses by concentrating on innovation, inward investment and enterprise policies
  • Making the most of universities as part of a wider economic strategy.