1. Getting a JOB WHERE THERE ARE NO JOBS: Local labour markets and the transition from education to work
Katy Morris
European University Institute
July 2018

2. Focus
Focus on young people in the United Kingdom who left full-time education and sought employment between 1993 & 2008
Research question: How do variable local labour market conditions affect the amount of time it takes young people to find a job, following departure from full-time education?
Focus on duration of job search owing to known ‘scarring effects’ (Ellwood 1982) of youth unemployment

3. Things We know
Youth unemployment is bad  short-term implications + long term ‘scarring effects’
Vulnerability to such ‘bad beginnings’ in the labour market is greater:
among young people with low educational attainment  individual effects
in countries with weak links between education & training system and labour market  country effects
during times of low macroeconomic demand  time effects
But we don’t know much about the consequences of trying to get a job in a place of low labour demand (e.g. Blackpool, Hastings)  place effects?
Even though youth unemployment is very geographically uneven in the UK and elsewhere…

4. Geographical variation in youth unemployment

5. Considerations
Uneven economic development & restructuring  substantial variation in industrial structures, occupational profiles and aggregate labour demand
Two otherwise similar young people in e.g. Cambridge & Hull encounter different local opportunity structures when leaving full-time education
Q: How does this affect the amount of time it takes them to find a job after leaving education?
2015
CAMBRIDGE
HULL
Unemployment rate
3.0
9.3
% Employed in high skill occupations
62.5
27.2
% Graduate employees
61.3
21.1
% Employees no qualifications
9.0
15.3
Median Weekly Wage
£590
£467
Source: UK Nomis (2015)

6. Expectations
Local conditions are not deterministic: expansive job search & migration offer means of escape
But two sets of theories suggest escape = more viable strategy for young people with high educational attainment:
Economic theories where migration reflects anticipated future costs and benefits (Sjaastad, 1962)
Sociological theories which stress role of social networks in job search (Granovetter 1973)
If so then labour queue theory (Thurow 1975) suggests:
H1: Low qualified  low demand  prolonged period of job search H1: Low qualified  high demand  short period of job search
H2: Highly qualified  global job search  no effect on job search time

7. Data Data: 1991-2008 British Household Panel Survey & UK Nomis
BHPS: used to identify when young respondents 1) leave education and 2) find a job and also 3) where they were living at these two points in time
UK Nomis: used to identify labour market conditions at the point of departure from education
Focus: relationship between local labour market conditions (demand as measured by JSA Claimant Rate) and the amount of time it takes young people to find two types of employment:
1) first job: any job that lasts for at least 1 month  initial period of labour market lockout
2) first significant job: a full-time job that lasts for 6+ months  initial period of labour market insecurity
Controlling for: gender, parental education, parental occupation, GCSE attainment, prior labour market expereince; country of residence; year of leaving education

8. Method & SAMPLE
Method: survival analysis, a technique often used in biomedical sciences to predict survival time
Sample of 2,753 young BHPS respondents observed leaving FT education, split by highest qualification:
Qualification
Definition N
Primary
less than GCSEs:
506 (18%)
Lower Secondary
e.g. GCSEs
1,055 (38%)
Upper Secondary
e.g. A-Level
686 (25%)
Tertiary
Bachelors or Masters degree

9. PREDICTED MEDIAN TIME IN MONTHS
Results: (1) FIRST JOB
PREDICTED MEDIAN TIME IN MONTHS
(1) FIRST JOB
High Demand
Low Demand
Difference
PRIMARY
3.0
7.0
4.0
LOWER SECONDARY
1.6
2.1
0.5
UPPER SECONDARY
1.3
0.3
TERTIARY
1.4
1.5
0.1

10. Results: (2) FIRSt SIGNIFNICANT JOB
PREDICTED MEDIAN TIME IN MONTHS
(2) FIRST SIGNIFICANT JOB
High Demand
Low Demand
Difference
PRIMARY
15.3
32.8
17.5
LOWER SECONDARY
5.5
8.7
3.2
UPPER SECONDARY
5.2
6.0
0.8
TERTIARY
4.3
4.6
0.3

11. ‘ON YOUR BIKE’?
Vast majority of young people find (1) first job and (2) first significant job whilst living in same locality  especially true for less qualified
Implies first job search tends to be local
Barriers to expanded job search & mobility:
information barriers
physical barriers e.g. transport
financial barriers e.g. moving costs & deposit
psychological barriers

12. SUMMARY
Started by highlighting the large differences in opportunity structures in the United Kingdom
Used representative BHPS data to explore relationship between local labour market conditions and the amount of time it takes young people to secure (1) any job and (2) a stable, full-time job
Uneven opportunity structures+ tendency to search for first job close to home = differential exposure to labour market lockout and labour market insecurity
Effects are concentrated among the least qualified young people: low skilled in areas of low labour demand face a double disadvantage when trying to enter the labour market
Additional education helps but better qualified young people located in places of low labour demand also face some time penalties vis-à-vis similar peers located in more favourable contexts

13. Places of Lowest Labour Demand 2017
Implications
Places of Lowest Labour Demand 2017
1. Hartlepool
11. Kingston upon Hull
2. Nottingham
12. Newcastle upon Tyne
3. Birmingham
13. Redcar and Cleveland
4. Tower Hamlets
14. North Ayrshire
5. Sandwell
15. Haringey
6. Middlesbrough
16. Sunderland
7. Barking & Dagenham
17. Southwark
8. South Tyneside
18. Brent
9. Wolverhampton
19. Bradford
10. Croydon
20. Caerphilly

14. Implications
Problem is ultimately one of ‘spatial mismatch’ (Kain, 1968) between the location of young labour market entrants and the location of suitable job opportunities
Solution A: Need renewed focus on educational attainment particularly in places of low labour demand
Solution B: Bring young people to the jobs
Build bridges between schools in ‘cold spots’ and employers
Offer a host of employer engagement activities from an early age
Offer financial support for long-distance job search and migration
Solution C: Bring jobs to the young people…

15. Questions, comments and Queries