More graduates taking low-skill jobs - report

University leavers have faced a tough jobs market since the economic downturn

University leavers are increasingly taking non-graduate jobs, according to research.

Six months after leaving university, about 40% of last year's graduates were "underemployed" in lower-skilled jobs, up from about 30% four years before.

The research, published by the Association of Accounting Technicians, says new graduates have been among the worst hit by the economic downturn.

A degree remains a "good investment", says a government spokesman.

The research, carried out by the Centre for Economics and Business Research, forecasts a worsening jobs market for graduates who will leave this summer.

Higher fees

It warns that 55% of the next wave of university leavers will either be working in non-graduate jobs, or will be unemployed, six months after they finish at university.

The report says this raises doubts about the financial value of degrees.

"If we are asking people to invest £9,000 a year on tuition fees, they should expect a credible return on that investment," said Jane Scott Paul, the association's chief executive.

The report concludes that "many university subjects are offering very poor returns in terms of improved job prospects".

The analysis looks at what it says is the growing trend for "underemployment", in which graduates are in low-skilled jobs where a degree is not required.

Four years ago, there were 32% of university leavers in low-skilled jobs six months after graduating.

The study forecasts that this will rise to 42%, for graduates leaving this summer.

Subject to change

There are variations between different subject areas, with history and philosophy graduates are most likely to be "underemployed".

Graduates in medicine, dentistry and veterinary science are the most likely to be in graduate employment.

The report also looks at graduate unemployment - warning that since the financial crash of 2008 "unemployment among new graduates has risen drastically".

The figure for those without jobs six months after graduating has risen from about 11% in 2007 to 20% for those graduating in 2010.

The study estimates that about 59,000 of last year's graduates have not found jobs, and that unemployment among new graduates is rising to levels not seen since the mid-1990s.

However the study shows that over a longer period graduates are still less likely to be unemployed compared to the national average.

Recent graduate job surveys have suggested that the employment market has begun to improve, after a deep decline during the financial downturn.

The Association of Graduate Recruiters (AGR) reported a growth in job vacancies earlier this year after "many months of misery for graduates".

But competition remains intense - with the AGR reporting that last summer many graduate employers were setting a 2:1 degree grade as a minimum entry level.

A spokesman for the Department for Business, Innovation and Skills said: "A degree is a good investment and is one of the best pathways to achieving a good job and rewarding career.

"Not only do employers prize the highly-developed skills and talents graduates can bring to their businesses, but research has shown that graduates earn, on average, more than £100,000 more over their working life."