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International students entering the UK labour market

30 Jan 2024

by Ben Brindle and Madeleine Sumption

International students have been one of the main drivers of unusually high levels of net migration in 2022 and 2023—alongside Ukrainians and rising numbers of people on health and care visas. In 2023, the government announced a series of restrictions designed to reduce migration to the UK, including a ban on most international students’ family members. The government also said that it would review the Graduate Route, which allows students to stay in the UK to work for two to three years after they graduate.

In the past, the large majority of international students have left the UK within a few years. However, the Office for National Statistics’ (ONS) recent upward revision of the 2022 net migration estimate from 606,000 to 745,000 was partly due to emerging evidence that more international students have stayed in the UK following the conclusion of their studies.

This raises the question of whether recent cohorts of international students will behave differently from earlier arrivals and with what impacts. In response to questions raised by the Financial Times, this analysis uses data provided to the Migration Observatory through freedom of information requests to look at what international students do in the UK after their studies. It shows that:

  • Recent cohorts of international students have been more likely to switch to work visas than in the past. This is not just because of the Graduate visa. More students are switching to long-term Skilled Worker Route visas, which provide a path to permanent residence in the UK.
  • A major factor behind the higher numbers switching to long-term work visas is the decision to make care workers eligible for the Skilled Worker Route in early 2022. More than half of all people who switched from graduate visas to skilled worker visas in the year ending June 2023 went into care work. This suggests many former students are overqualified for their Skilled Worker Route jobs.
  • Relying on former students to help staff the care sector has advantages and disadvantages. Being overqualified may mean international graduates lose opportunities to build their skills. However, it is possible that graduate-to-work switchers are less vulnerable to exploitation, which has been a significant problem in the care sector.

Recently announced restrictions on work visas may have some impact on these patterns, though this is hard to predict. The proposed policy changes do not affect eligibility for main applicants on the care visa but would prevent people with children from using the care route to stay in the UK after their studies.

How many students are switching to work visas?

The Graduate Route, introduced for students graduating in 2021 onwards, makes it easier for students to stay in the UK for work by granting them two- to three-year work visas. Take-up of the route has been high: 129,000 graduate visas were granted in the year ending September 2023.

It is too early to say what share of each student cohort will use the graduate route or switch to other types of visas. After all, most are still studying. For example, 74% of people who received a study visa in 2021 were still studying at the end of 2022 (255,000), the latest year for which the relevant data are published. However, we can get an early indication of the trends by looking at the share of international students in each annual cohort who had already moved to work visas by the end of the year after arrival. It’s important to remember that these early movers may not be representative of all international students.

For non-EU students who received their initial visa between 2016 and 2019—under the pre-Brexit immigration system—only a tiny fraction had switched to a work visa by the end of the year after they initially received their study visa. At the time, there was no Graduate Route. People switching within 1-2 years (e.g. after completing a one-year master’s programme) would usually need to get a skilled job offer with an employer willing to sponsor them for a long-term Skilled Worker Route visa.

For the 2020 and 2021 cohorts, the share of people switching to work visas rose sharply by the end of the first year after arrival. Fifteen per cent (or 52,500) of the 2021 cohort had moved to a work visa in this timeframe (Figure 1). The previous peak was for the 2010 cohort, 4% of whom were on a work visa by the end of the first year after arrival (10,000).

Unsurprisingly, the share moving to work visas has gone up since the Graduate Route is designed to allow exactly this. It’s currently unclear what types of jobs people on the Graduate route are doing as the government has traditionally not collected statistics on most visa holders’ economic activities. It is also too early to say how many will stay beyond the end of their graduate visa and get a visa that allows them to remain long-term or permanently in the UK.

Perhaps more notable than the increase in switching to work itself is the higher share of former international students moving onto the Skilled Worker Route (Figure 1). By the end of 2022, 8% of non-EU students who received their initial visas in 2021 had already switched to this route (26,000), up from less than 1% in 2016 to 2019.

Figure 1

Around 9% (or 29,500) of non-EU students receiving visas in 2021 no longer held a valid visa (i.e. were expected to have left the country) by the end of 2022. This is down from 22% (or 54,000) in 2010 when a ‘post-study work’ regime broadly similar to the Graduate Route was also in place.

Are graduate switchers doing graduate jobs?

Students who want to switch to long-term skilled work visas must find an employer to sponsor them. Under the pre-Brexit immigration system, this usually required finding a graduate job. By contrast, the post-Brexit work visa system includes a wider range of jobs.

The FOI data we use include around 92% of people switching from Graduate Route visas to Skilled Worker visas and about 96% of people entering the country on the Skilled Worker route. The remaining data were suppressed for confidentiality reasons (see the Appendix for details). Our data do not include people who switched directly from a study visa to a Skilled Worker Route visa. These people may hold different jobs than the graduate-to-work visa switchers discussed below.

Most striking is the popularity of jobs in the care sector. More than 60% of people (from both EU and non-EU countries) who moved from the Graduate Route to the Skilled Worker Route in the year ending June 2023 became care or senior care workers (26,200). This is considerably higher than the share of Skilled Worker Route visas going to care for people who apply out of country (i.e. who, in most cases, are not former international students). In the year ending June 2023, 41% of skilled worker entry visa grants were in the care sector (77,700).

A closer look at the age profile of graduate visa holders switching into Skilled Worker Route care jobs shows that these people were more likely to be aged 26 or over. This was the case for 64% of care switchers in the year ending June 2023, compared to 52% of those switching into non-care roles.

Figure 2

Of the 16,300 people who switched to jobs other than care, most took up roles that require graduate-level skills, such as management consultants, doctors and programmers (10,000). Before Brexit, graduate jobs would have been the only option for most students switching into work, but in the year ending June 2023, they made up just under a quarter of the total (see Table 1).

Table 1

Most people switching from the Graduate Route to Skilled Worker route in graduate jobs were paid at least £30,000 in the year ending June 2023, but relatively few of those in middle-skilled were (Figure 3). The Home Office has announced that the salary threshold for skilled workers will rise from £26,200 to £38,700 in 2024. This could lead to a decline in the number of students switching into middle-skilled and graduate roles while leaving the care sector, which is not subject to the new threshold unaffected.

Figure 3

The impact of the new salary rules on Graduate-to-Skilled Worker switchers will depend on whether there are exemptions for non-care jobs. The government has not yet confirmed whether the discounted salary threshold of 20% for skilled workers aged under 26 or recently graduating from UK universities will remain in place, and it remains uncertain how extensive the Immigration Salary List (ISL), previously known as the Shortage Occupation List, will be. If the new system contains few exemptions to salary thresholds, the dominance of the care sector as a destination for former students switching to long-term work visas could increase further.

Does it matter?

The qualifications required for care work are equivalent to GCSEs. This suggests that many people switching from graduate to long-term work visas in the UK are significantly overqualified for their jobs. The majority of international students in the UK study for master’s degrees, although we do not have data on the subject or level of study for people receiving Skilled Worker Route visas as care workers or otherwise. We also don’t have data on what qualifications people have when they come to the UK without having been a student first. Over-qualification is widespread among migrant workers in general.

Is it a problem if former international students working in the UK are overqualified? For the workers themselves, there are drawbacks. If people complete master’s qualifications and then move into jobs that do not require them, they will not necessarily be building on the skills acquired in their degrees and may see these skills atrophy. Of course, having the option to stay in the UK as a care worker will still be better for those individuals than not having that option.

For the UK, over-qualification may have benefits. For example, employers may benefit if they are able to recruit more skilled people, including former students who already speak good English after studying in the UK, because these workers may be more productive. Previous research found that over-qualification of migrants in the UK had contributed to (small) increases in average wages.

It is possible that former international students will be less vulnerable to exploitation than people coming directly from abroad for care work. This is because they are more likely to have local knowledge and language skills and can scope out employers while on the graduate route without relying on (sometimes exploitative) middlemen. By contrast, people coming directly from abroad often find it harder to get information or meet their employer before taking up the job. Exploitation of care workers has been a significant problem over the past year.

Implications for/of the care visa

The data suggest that the number of non-UK citizens entering the care sector on work visas is even bigger than previously thought. Official figures showed 77,700 care workers on out-of-country visas in the year ending June 2023 (the period for which we have FOI data). If we add the 26,200 graduate-to-work visa switchers joining the care workforce in-country, the figure in that period was actually around 34% higher than the official statistics suggested, at 103,900 in the year ending June 2023. (This figure would presumably be higher still if some of the international students switching directly from study to work visas were included.) The number of out-of-country care work visa grants continued to rise in the second half of 2023.

It remains to be seen how the trend of graduates taking care jobs will affect retention in the sector. In the short run, relying on migrants whose visas require them to remain in an eligible job may increase retention. However, it is also possible that people with UK degrees will move out of the sector if and when they are able to find graduate jobs or when they receive permanent status (ILR).

Whether it is a good idea for substantial numbers of former international students to join the care workforce in the UK in large part depends on the rights and wrongs of the care visa itself. Reasonable people may disagree about how heavily the UK should rely on overseas workers to staff the care sector, either in the short or long term. The Migration Advisory Committee has argued that the long-term solution is to improve wages and conditions for all workers in the sector rather than relying primarily on migration to address workforce shortages, for example.

Will it affect net migration?

In the past, the large majority of international students have left the UK within a few years. This was the case even when there was a post-study work route in 2008-2011. However, the data presented here suggest that the care route could mean a substantial increase in the share of international students who remain in the UK long term. Compared to a scenario with no care visa, this would imply higher levels of net migration.

However, in a scenario where the care visa continues to exist, former students switching to care work do not necessarily increase overall net migration. Why? If we assume that the total number of people recruited into the care is driven by demand in the sector, fewer Graduate Route switchers might simply mean that employers recruit more care workers from overseas instead.

In other words, it is reasonable to assume that the care route, rather than the student route itself, is the underlying factor driving net migration in the current scenario.

What happens next?

Data on switchers from the Graduate Route to the Skilled Worker Route in 2022 or 2023 may not be representative of all students. The data cover the first students to use the Graduate Route, and trends often shift over time. The data presented here thus offer only a partial indication as to how the behaviour of international students may be changing.

The care visa route is also changing. From Spring 2024, people entering the care route will not be able to have family members with them in the UK. Students who are already in the UK with children would no longer be able to switch into the care visa and get dependants’ visas for their children. This may reduce the incentive to switch into care, at least for some people (though it will still be possible for students themselves and their partners both to move into care work if they want to remain in the UK). There are no published data on how many former students switching into care work have children.

Discussions about international students switching to work visas have naturally focused on the Graduate visa. The government recently announced its intention to review the route. The Graduate visa may have some impact on long-term stays because it gives students longer to look for an employer who would sponsor them long-term. However, the data we have presented here suggest that in the long run, the care route may have more influence on how many international students remain in the UK than the Graduate Route.

Thanks to Holly White, Jonathan Portes and James Bowes for comments on an earlier draft.

Appendix: the FOI data

The FOI data we received from the Home Office show the number of people receiving a certificate of sponsorship (CoS) for a Skilled Worker Route visa. When employers sponsor a worker, they must assign them a CoS, which the worker then uses to apply for their entry visa to the UK.

We received data on Skilled Worker CoS issuances for two groups: people moving from the Graduate Route to the Skilled Worker Route in-country and people applying for an initial Skilled Worker Route visa from outside of the UK.

For each group, our data show the number of CoS issued by occupation, the salary listed on the CoS, and whether the applicant was age 26 or over at the point of application. The salary information was listed in three categories: less than the general Skilled Worker threshold in place at that time, between the general threshold and £29,999, and £30,000 and above. The general Skilled Worker threshold was £25,600 until 11 April 2023 and £26,200 from 12 April 2023 onwards.

Our data contain detailed information on 184,522 people receiving a CoS from outside of the UK in the year ending June 2023 and 42,484 people switching in-country from the Graduate Route. However, because there are sometimes very few people with specific combinations of characteristics, some of the data was suppressed to protect confidentiality. This means that a few per cent of applications are not included, which may affect some of the results. For example, fewer people transitioning from graduate visas are both under 26 and earning over £30,000. As a result, these workers may be underrepresented in the data. However, we expect this suppression to have only a small impact on the results presented. The totals will also not precisely match other published figures.

Our data include people who are issued a CoS but do not come to the UK, although this will occur in relatively few cases.

 

Underlying FOI data – International students in the labour market

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