The next London Challenge

This report from the UK think tank Social Market Foundation looks at converting strong educational performance into great jobs for disadvantaged Londoners.

Political debate around social mobility tends to describe London as a success story. This reflects the tendency among politicians and commentators to see social mobility through the lens of school performance and exam results. This report explores the employment outcomes of disadvantaged Londoners – focusing on the extent to which disadvantaged Londoners can translate their better-than-average education attainment into successful careers.

London’s education story

Disadvantaged young people do exceptionally well in London’s education system up until the age of 16. Londoners eligible for free school meals (FSM) perform well at GCSE – the gap between those eligible for FSM, and those who are not, is much less marked in London than in other regions. Unfortunately, this performance at 16 does not continue into A level. Inner London’s strong performance at GCSE does not appear to translate into high A level grades. A large proportion of young Londoners go to university – however, students at university in London are more likely to drop out of university compared to the other regions of England. Graduates are also affected by degree class attainment gaps by ethnicity and socio-economic status.

London’s labour market

Although London has higher wages than other regions, London also has above average unemployment. The competitive nature of the city’s labour market can mean that graduates from London struggle to obtain graduate jobs. Graduates who lived in London prior to university have the lowest employment rate of graduates in England, and this is true one, three, five and ten years post-graduation.

Using the Next Steps dataset (LYSPE), we can track Londoners who performed well at GCSE (5+ A* to C grades including English and Maths) into the labour market. This shows that those from lower socio-economic backgrounds have significantly lower earnings at age 26, compared to those from more advantaged backgrounds. Londoners who have a degree and are from lower socio-economic backgrounds experience a ‘pay penalty’ of £1,664 per year. For those without a degree, this pay penalty stands at £4,004. This suggests that London may not be the social mobility hotspot many believe it be.

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