Housing and the Northern
Brain Drain
Matthew Oakley and Guy Miscampbell
01/11/2016
CONFIDENTIAL
About
About these slides
-
-
-
These slides, alongside a report, provide the final output for the Homes for the North project “Housing and the Northern Brain
Drain”. They outline results from:
-
A rapid review of the existing literature;
-
An extensive set of original polling undertaken to gain insight into the decisions of graduates (both recent and older).
A stakeholder engagement exercise with businesses and business representatives from the North of England;
Original analysis and modelling using data from the Labour Force Survey and the Destinations of Leavers from Higher
Education Longitudinal Survey; and
This research is used to:
-
Present the scale of the Brain Drain issue and the potential impact on businesses and the economy;
-
Outline key drivers of the decisions that people make to locate in one region or another, and make suggestions for how
the second phase of this work might be taken forward.
Understand the characteristics and location decisions of those graduates (both recent and older) who choose to move
regions; and
Definitions used throughout this slide pack:
-
Northern Powerhouse = the combination of all of the regions of the North of England.
Highly qualified = individuals with degree level qualifications and above
3
Executive Summary
Northern qualifications deficit
- Despite overall qualification levels rising over the last ten
years, the regions that form the Northern Powerhouse have a
significant qualifications deficit compared to London and this is
putting a brake on the potential of the economy.
- This deficit is long-standing and has worsened (slightly) in the
last ten years.
- Not all areas within the Northern Powerhouse perform equally
– Merseyside, Manchester and the Rest of the North West
have the highest qualification levels and have increased these
strongly over the last three years.
5
What is driving qualifications deficit
Home
grown
talent
Inflow
of talent
Outflow
of talent
Talent
pool
- Flows (in and out of areas) of highly qualified individuals are a
key driver of the overall level of highly qualified individuals in
particular region.
- This makes mobility of the highly qualified workforce a key
factor. There are three key groups of highly qualified
individuals who tend to be most mobile: recent graduates (1824); early career movers (25-35); and mid-career movers (>35).
6
Overview of mobility for each group
- Analysis of the location decisions using HESA data on recent graduates
shows that all regions perform poorly compared to London. Regions in the
Northern Powerhouse perform relatively well (in terms of attracting and
keeping graduates) compared to other non-London regions.
- Analysis of the Labour Force Survey shows that Northern Regions have a
net outflow of highly qualified individuals (18-34) to London and the South
East.
- However, Northern Regions are more attractive to highly qualified workers
aged over 35. Some areas have a net inflow for this age group.
- Across all of these results, it is clear that not all areas perform equally.
More granular geographical analysis shows a clear “major city” pull to (e.g.)
Manchester.
7
Overall headlines
- Using the Labour Force Survey to look across all ages, over the last ten
years there has been a net outflow of highly qualified (British resident)
individuals from the Northern Powerhouse Regions.
- However, this has been moderated by inflows of highly qualified immigrants
from outside of the UK, which have meant that there has been an overall
inflow of highly qualified individuals in all regions
- Again the picture varies within the Powerhouse Regions, with the North
East and Yorks and Humber performing relatively poorly and Manchester
and South Yorkshire performing relatively well.
- Businesses in the North of England say they struggle to recruit people with
the right qualifications and skills and this is putting a brake on the
ambitions to form a Northern Powerhouse.
8
Are housing and place important?
- Our research and stakeholder engagement suggests that housing
and place could play an important part in the location decisions of
those with high qualifications.
- However, there is unlikely to be a one-size-fits all answer to
improving the attractiveness of the housing offer.
- Given the large differences in the location decisions of younger (<35)
and older (35-50) movers and different outcomes for component
parts of the North of England, responses to increase the
attractiveness of the housing and place offers will need to be
tailored. They will need to meet the needs of different groups of
movers and be specific to the region / city / area in which they are
being considered.
- The next stage of the work will explore some of these issues.
9
Full Pack
Qualification inequalities in the UK
Qualification inequalities in the UK
-
Significant qualification inequalities
exist across the UK.
-
Around 70% of the working age
population have moderate or
above (GCSE+) qualifications in all
regions
-
However, large differences exist
across regions within that group
with moderate and above
qualifications.
-
More than four in ten of the
working age population have
degree level (or above)
qualifications in London. Across the
Northern Powerhouse, the figure is
around half of that (just over two
in ten)
Around 4 in 10 with
at least degree level
qualifications
Around 2 in 10 with
at least degree level
qualifications
Labour Force Survey
Source: WPI Economics analysis of LFS 2016, Q1
12
What does this mean in terms of
numbers of people?
Labour Force Survey
-
-
If the share of the population with high
qualifications in London is taken as a baseline,
how many more highly qualified workers should
different regions have if they met this baseline?
i.e. What is the “high qualifications current
deficit” compared to this?
“Current deficit” column here shows the
number of highly qualified individuals needed
to close the deficit with London.
The third column shows this in the context of
the existing highly qualified population. e.g. it
shows that South Yorkshire would need
111.76% more (over double) highly qualified
individuals to match the population share in
London.
Current deficit
Deficit (% of
existing highly
qualified)
Rest of North East
285,853
115.95
South Yorkshire
190,181
111.76
West Midlands (Met
County)
741,402
109.47
Tyne & Wear
161,178
107.92
East Midlands
383,728
101.05
East Anglia
380,499
97.09
West Yorkshire
305,816
94.10
Rest of Yorks & Humb
218,174
92.90
Merseyside
308,035
88.06
Rest of West Midlands
337,959
79.60
Rest of North West
454,600
73.83
Greater Manchester
516,960
70.47
1,309,381
65.33
542,383
59.10
South West
Rest of South East
Source: WPI Economics analysis of the LFS 2016, Q1.
13
This is not a new thing
-
A significant
qualifications gap has
existed for many years.
-
Chart shows the case for
the Northern
Powerhouse as a whole.
-
While London and
Northern Powerhouse
have both seen
increasing qualification
levels, the qualifications
deficit has grown over
the last ten years.
Labour Force Survey
Source: WPI Economics analysis of LFS 2006-2015
14
There are significant differences by age
group
-
The table below shows share of each age group with degree+ qualifications, by region.
-
The largest differentials (or qualifications deficits) are in the 25-34 year old age group (next slide)
Labour Force Survey
Unsurprisingly, there are a higher proportion of people with degree level (+) qualifications in the 2534 and 35-49 age groups.
Region
18-24
25-34
35-49
50-64
London
23.03%
58.72%
47.36%
32.15%
Scotland
12.13%
38.91%
34.73%
21.98%
SE / East
16.78%
36.61%
36.84%
24.91%
South West
15.56%
34.26%
36.51%
24.32%
Northern
Powerhouse
13.18%
33.03%
30.29%
20.57%
Midlands
13.90%
32.10%
27.00%
20.58%
NI
12.84%
30.59%
25.22%
16.49%
Wales
16.21%
29.17%
30.30%
21.00%
Source: WPI Economics analysis of LFS 2016, Q1
15
Deficits are larger for prime-aged
workforce
-
Deficits compared to London are much larger for 25-34 year olds
and 35-49 year olds.
Source: WPI Economics analysis of LFS 2016
Labour Force Survey
16
Intra-regional variations
Labour Force Survey
Source: WPI Economics analysis of LFS 2006-2015
-
Trends have been broadly
similar across all regions in the
Northern Powerhouse in the
last ten years (above)
-
The last three years have seen
GM, North West and
Merseyside outperform other
regions in the North (right)
Source: WPI Economics analysis of LFS 2006-2015
17
Drivers of qualifications inequality
-
Having shown large qualifications inequalities across the UK, the obvious question is why this
is the case?
-
In very basic terms, the number (and proportion) of highly qualified individuals in a particular
area (“the talent pool”) is driven by three things:
Home
grown
talent
-
Inflow
of
talent
Outflow
of
talent
Talent
pool
This project focuses on the flows of talent in and out of the regions within the Northern
Powerhouse.
18
“Brain Drain” as a likely cause
-
The potential flows North-to-South of highly qualified individuals (the Northern Brain Drain)
was the founding point of this project.
-
In the literature review and stakeholder interviews we have conducted, this has been
presented as a likely cause. In short, many see a large part of qualifications inequality between
regions as being attributable to highly skilled labour being drawn to London and the SouthEast;
-
This raises two key questions:
-
Is the highly qualified workforce more likely to move regions and if so, at what age do
they move (on graduation, following professional accreditation, later in their career)?
-
Where are the patterns of their movement? Do they study in the North and then move
South? Are they born in the North and then migrate South for study and later work?
19
Who moves?
Who Moves? Findings from the Literature
-
Individuals with higher levels of skill are generally more mobile, primarily due to the
greater opportunities available to them;
Previous Migratory Behaviour
Age and Maturity at time of graduation
Higher Levels of Human Capital
Lower Receipt and Dependence on Transfer Payments
Gender (Male)
Availability of job opportunities/surplus
Education
Some findings suggest
that increased
opportunities increase
mobility, but also the
focussed nature of interregional migration.
This means that moves by
highly skilled individuals
are more likely to be
calculated and deliberate.
•
•
•
•
•
•
Attaining a degree;
Degree level;
Degree classification;
Selectivity of University;
Degree of specialisation;
Science subject;
21
Also borne out by our analysis
-
Labour Force Survey
Of those moving regions between 2006 and 2015:
-
Around half have degree level qualifications or above
Around two thirds are below the age of 35
Age of those moving regions
Qualifications of those moving
regions
30%
46%
38%
18-24
25-34
35-49
50-64
Degree +
Good quals
Low quals
No quals
Source: WPI Economics analysis of LFS 2006 – 2015 (Q2s)
22
Age profile of high qualification movers
Labour Force Survey
- Over half of those
with degree level+
qualifications who
move regions are
aged 30 and under
- Another 30% are
aged between 30
and 40.
Source: WPI Economics analysis of LFS 2006 – 2015 (Q2s)
23
Our area of focus
Labour Force Survey
Group of
movers
Age
Proportion
of movers
Potential move motivations
-
Graduates
Early career
movers
Mid-career
movers
Late-career
movers
18-24
20%
-
Completed professional
qualifications (or post-grad) –
seeking better jobs
Lifestyle (partnering)
26%
-
Jobs
Lifestyle (work-life balance)
8%
-
Jobs
Retirement
Family
25-29
27%
30-34
19%
35-50
50-64
-
Completed graduate
qualifications – seeking jobs
Seeking further training
opportunities
We focus
here in
what
follows
24
How do we look at this?
- Graduate mobility: As outlined in the project brief, using existing evidence
and undertaking original analysis of the movements of recent graduates
using the Destinations of Leavers from Higher Education Longitudinal
Survey (HESA). This allows us to track a sample of recent graduates over
three years from graduation.
- Net regional flows: To assess the potential importance of the older age
groups and to assess overall flows of highly qualified individuals in and out
of different regions, we also undertook significant original analysis of the
Labour Force Survey over the last 10 years. This allows us to track highly
qualified people of all ages and to also consider highly qualified immigrants.
25
Graduate mobility
The literature is clear
-
“Young skilled people respond to the personal benefits of the regional ‘escalator’
while collectively they fuel the skills gaps between cities.”1
-
“While levels of graduate creation are similar across urban areas, levels of retention
differ as graduates flow from universities in cities in the north and west to the
economic opportunities presented by London and cities in the south and east.”2
-
Previous studies on graduate locational choices suggest that there is one dominant
‘winner’ region (London), two that break even (Scotland and Yorkshire), and that
the remainder of regions are ‘losers’.3
-
“There is a positive, and mutually reinforcing, dynamic at the city level with high,
historical, stocks of graduate talent in the population… cities who begin with low
graduate stocks will find it very difficult to change their relative position and add to
their small stocks of talent.”4
1.
2.
3.
4.
Pike. A, et al. ‘Uneven growth: tackling city decline,’ Joseph Rowntree Foundation, 2016
Parkinson. M, et al. ‘State of the English Cities,’ Office of the Deputy Prime Minister, 2006
Hoare. A, & Corver. M, ‘The Regional Geography of New Young Graduate Labour in the UK,’ 2010
Cowling. M, ‘The Geographical Distribution of UK Talent: Causes and Consequences,’ Institute for Employment Studies, 2009
27
HESA analysis
- These findings were also reflected by our analysis
- There are four things to consider here:
- Graduate retention: Whether those studying in Universities in the
-
Northern Powerhouse stay there for work after they graduate;
Home-grown talent returners: Whether graduates domiciled in the
Northern Powerhouse regions during University stay in there for work
after they graduate;
- Attracting talent: Whether graduates who choose to move region after
graduation choose regions in the Northern Powerhouse after they
graduate.
- Keeping talent: whether once finding work in the Northern
Powerhouse these individuals remain there.
- Each question is considered in turn below.
28
Graduate retention rates
HESA
-
Three years after
graduation – just half of
all employed students
are still in Northern
regions (note that North
West does a little better)
-
This compares badly to
London (where 7 in 10
stay), but is not dissimilar
to other non-London
regions. In fact, Northern
regions perform
relatively well compared
to non-London regions.
Source: WPI Economics analysis of HESA DLHE data, 2014
29
Home grow returners
-
Northern regions also perform relatively well in terms of retaining highly qualified
individuals who were resident in the North of England before they went to University.
-
Top three performing regions after London.
HESA
Source: WPI Economics analysis of HESA DLHE data, 2014
30
Attracting talent
-
The largest differences are in the ability for regions to attract talent. All non-London regions
perform badly on ability to attract employed graduates, post graduation
-
Two of bottom three regions are in North of England (although differences are small, apart
from London)
HESA
Share of graduate employment locations - three years after
graduation
35%
30%
25%
20%
15%
10%
5%
0%
North East
East Midlands Yorkshire and
The Humber
South West
Source: WPI Economics analysis of HESA DLHE data, 2014
East of
England
West Midlands North West
South East
London
31
Attracting talent (2)
HESA
-
Of course these disparities
are, in part, due to the
different sizes of the
regions.
-
The chart shows the deficit
of movers – the proportion
actually locating in region
minus the proportion that
would be expected based
on the working age
population of the region.
-
The Northern regions
perform relatively well. But
still a significant deficit.
Source: WPI Economics analysis of HESA DLHE data, 2014
32
Keeping talent
HESA
-
Once graduates have
chosen location of work,
they are reasonably
sticky
Retention of graduates three years after
originally working in region
90%
85%
-
Northern regions (again)
do quite well in terms of
“stickiness”. Here there is
a marked increase in
performance compared
to the non-Northern
regions – particularly for
the North West.
80%
75%
70%
65%
South East
East
Midlands
East of
England
South West
Yorkshire
and The
Humber
North East
West
North West
Midlands
London
Source: WPI Economics analysis of HESA DLHE data, 2014
33
What does this suggest?
- All regions compared badly to London across all four areas of
graduate mobility.
- But Northern Powerhouse regions perform relatively well –
particularly the North West.
- However, that does not mean that more should not be done to
improve the situation. The Northern regions still have a
significant qualifications deficit.
- And, as the following slides show, there are large differences
between the different areas within the Northern Powerhouse.
34
Summary of mobility maps
-
The following slides show maps at an LEP level of where students who studied in
various Cities / City Regions in the Northern Powerhouse ended up in employment
following graduation. (2012-13, 2013-14)
-
In all cases the top destination is London. Areas surrounding the Higher Education
Institution were the next largest destinations.
-
This suggests a degree of intra-regional mobility, and that if graduates do not move
to London they tend to prefer areas close to where they studied.
-
Key non-London destinations that had migration from both the selected LEPs, and
were not directly proximate to either of them were Leeds and Greater Manchester,
suggesting a ‘large city’ appeal.
-
Even though there are some common trends, the performances of different
Northern Sub-Regions varies substantially in terms of end location of graduates,
especially those who choose to remain in the North.
35
Where do they go?
-
Students from Liverpool and North Yorkshire were most concentrated in London,
followed by regions surrounding their higher education institution.
Liverpool City Region
HEFCE/HESA
North Yorkshire
Source: HEFCE Student Mobility Briefing, based on HESA Student Record and the Data Service Individualised Learner Record, 2015
36
Where do they go?
-
Students from the North East and Greater Manchester settled mostly in London,
followed by Leeds and the surrounding areas.
North East
HEFCE/HESA
Greater Manchester
Source: HEFCE Student Mobility Briefing, based on HESA Student Record and the Data Service Individualised Learner Record, 2015
37
Where do they go?
-
Cheshire and Warrington and Cumbria are both unique in favouring local destinations
(Lancashire and Manchester), though London is still preferred to most other regions.
Cumbria
HEFCE/HESA
Cheshire and Warrington
Source: HEFCE Student Mobility Briefing, based on HESA Student Record and the Data Service Individualised Learner Record, 2015
38
Where do they go?
-
The top destination for both the Tees Valley and Leeds is London, followed by areas
immediately surrounding the area the student studied in.
Tees Valley
HEFCE/HESA
Leeds
Source: HEFCE Student Mobility Briefing, based on HESA Student Record and the Data Service Individualised Learner Record, 2015
39
Where do they go?
-
London is the main destination for students from Sheffield and Lancashire. After that
the top destinations are Leeds, Manchester, and other large cities in the North.
Sheffield
HEFCE/HESA
Lancashire
Source: HEFCE Student Mobility Briefing, based on HESA Student Record and the Data Service Individualised Learner Record, 2015
40
Net regional flows
The bigger picture
- The previous section outlined location decisions for recent graduates
and showed that, compared to other non-London regions, the
Northern Powerhouse regions compare relatively favourably on a
number of measures.
- However, this only presents part of the picture of the flows of highly
qualified individuals. The next slides look at a fuller picture by
considering the overall flows of highly qualified individuals between
different regions.
- Because of sample size constraints, the data are presented for 18-34
year olds and 35-50 year olds and represent a picture of movements
over the last 10 years.
42
Net flows of highly qualified 18-34 year
olds
Labour Force Survey
-
Significant outflows of highly qualified 18-34 year old British
resident workforce for all regions apart from London & SE/East
-
However, these are moderated by immigration of highly qualified
workers from outside of the UK.
Wales
South West
Midlands
Northern Powerhouse
Scotland
SE / East
London
Moved out %
5.37%
7.12%
6.01%
6.27%
3.79%
5.60%
5.89%
Intra-regional
Moved in %
3.20%
5.16%
4.84%
5.26%
3.02%
6.30%
7.72%
Net flow %
-2.17%
-1.97%
-1.16%
-1.01%
-0.77%
0.70%
1.83%
Net flows across regions for
those already resident in UK
Immigration in-flow
Gross in-flow %
1.34%
1.47%
1.30%
1.70%
1.77%
2.17%
3.44%
All
Moved in %
-0.83%
-0.49%
0.13%
0.69%
0.99%
2.87%
5.27%
Source: WPI Economics analysis of LFS 2006 – 2015 (Q2s)
-
Note that in this slide and those that follow, %’s reflect
the proportion of the highly skilled population (rather
than working age population as a whole)
Net flows including
immigration
43
Net flows of highly qualified 35-50 year
olds
-
Flows of slightly older (35-50 year old) workers with degree level
qualifications is more positive for the North of England. This mirrors
previous evidence that suggests similar trends.
-
Talks to the different motivations of the different groups and the need
to tailor policy responses appropriately
London
Midlands
Northern Powerhouse
Scotland
South West
Wales
SE / East
Moved out %
2.92%
1.64%
1.59%
1.02%
1.64%
1.09%
1.53%
Intra-regional
Moved in %
2.33%
1.53%
1.55%
1.12%
1.82%
1.36%
1.93%
Net flow %
-0.59%
-0.11%
-0.04%
0.10%
0.17%
0.27%
0.41%
Immigration in-flow
Gross in-flow %
1.34%
0.55%
0.55%
0.59%
0.52%
0.18%
0.70%
Labour Force Survey
All
Moved in %
0.75%
0.44%
0.51%
0.69%
0.69%
0.46%
1.11%
Source: WPI Economics analysis of LFS 2006 – 2015 (Q2s)
-
Question is then how this looks within the Northern Powerhouse – are all
regions similarly affected?
44
Significant movement within North
-
Given the large size of the Northern Powerhouse, it is unsurprising that large
proportions of highly qualified movers leave their current region, but move to
within wider regional boundaries (e.g. 51% of those leaving a Northern
Powerhouse region choose another region within the Powerhouse).
Labour Force Survey
Region moved to
Region moved from
Northern
Powerhouse
Midlands
London
SE / East
South West
Wales
Scotland
NI
Northern
Powerhouse
Midlands
London
SE / East
South West
Wales
Scotland
NI
44.75
13.25
16.12
14.62
4.13
1.91
4.27
0.96
21.64
4.28
9.92
11.8
19.22
20.3
34.79
24.09
4.62
10.46
11.47
14.35
7.96
-
14.61
46.31
46.58
29.27
21.79
11.41
16.42
22.55
37
11.65
37.46
20.59
17.46
14.64
9.73
4.43
13.85
21.61
6.32
-
3.39
1.36
2.96
6.47
3.06
21.53
3.3
1.56
4.35
3.53
2.44
30.81
12.61
0.7
0.43
0.23
2.67
-
Source: WPI Economics analysis of LFS 2006 – 2015 (Q2s).
Note that “within region” movement in South West, Wales and NI are all zero as there are no sub-regional breakdowns of the data for these areas.
-
So what does this mean for flows from smaller geographical areas?
45
A more in-depth regional picture
- Flows of highly qualified 18-34 year olds
Rest of North East
Rest of Yorks & Humberside
West Midlands (Met County)
Wales
South West
Rest of North West
Rest of Scotland
East Midlands
Merseyside
Strathclyde
East Anglia
Tyne & Wear
West Yorkshire
Greater Manchester
Rest of West Midlands
Inner London
South Yorkshire
Rest of South East
Outer London
Intra-regional
Moved out %
Moved in %
8.12%
3.38%
8.70%
5.45%
6.14%
3.32%
5.37%
3.20%
7.12%
5.16%
6.69%
5.37%
4.39%
3.46%
5.99%
5.10%
5.20%
4.46%
3.00%
2.44%
7.71%
7.18%
6.36%
5.88%
5.86%
5.67%
4.98%
5.22%
5.89%
6.23%
6.47%
6.91%
5.78%
6.67%
5.23%
6.15%
5.19%
8.71%
Net flow %
-4.74%
-3.24%
-2.81%
-2.17%
-1.97%
-1.31%
-0.93%
-0.89%
-0.74%
-0.56%
-0.53%
-0.49%
-0.19%
0.24%
0.34%
0.44%
0.89%
0.92%
3.52%
Immigration in-flow
Gross in-flow %
1.09%
1.92%
1.61%
1.34%
1.47%
0.85%
1.84%
1.30%
1.25%
1.67%
3.44%
2.95%
2.04%
1.51%
0.92%
4.22%
2.78%
1.94%
2.49%
Labour Force Survey
All
Moved in %
-3.66%
-1.32%
-1.21%
-0.83%
-0.49%
-0.46%
0.91%
0.41%
0.51%
1.11%
2.91%
2.46%
1.85%
1.75%
1.26%
4.66%
3.68%
2.86%
6.01%
Zoom on
next page
Source: WPI Economics analysis of LFS 2006 – 2015 (Q2s)
46
A more in-depth regional picture
- Flows of highly qualified 18-34s
Rest of North East
Rest of Yorks & Humberside
Rest of North West
Merseyside
Tyne & Wear
West Yorkshire
Greater Manchester
South Yorkshire
Intra-regional
Moved out % Moved in % Net flow %
8.12%
3.38%
-4.74%
8.70%
5.45%
-3.24%
6.69%
5.37%
-1.31%
5.20%
4.46%
-0.74%
6.36%
5.88%
-0.49%
5.86%
5.67%
-0.19%
4.98%
5.22%
0.24%
5.78%
6.67%
0.89%
Labour Force Survey
Immigration in-flow
Gross in-flow %
1.09%
1.92%
0.85%
1.25%
2.95%
2.04%
1.51%
2.78%
All
Moved in %
-3.66%
-1.32%
-0.46%
0.51%
2.46%
1.85%
1.75%
3.68%
Source: WPI Economics analysis of LFS 2006 – 2015 (Q2s)
-
A mixed picture within the Northern Powerhouse. With Greater Manchester and South
Yorkshire seeing a net inflow of highly qualified 18-34s even before immigration.
-
Conversely, Yorks and Humber and more rural areas see large outflows.
In all cases, the inflow of highly qualified immigrants improves the situation.
47
A more in-depth regional picture (2)
- Flows of highly qualified 35-50 year olds
Inner London
Tyne & Wear
West Yorkshire
East Anglia
West Midlands (Met County)
Rest of North West
Rest of North East
East Midlands
Merseyside
Strathclyde
South West
Rest of Scotland
Wales
Outer London
Rest of South East
Rest of West Midlands
Greater Manchester
South Yorkshire
Rest of Yorks & Humberside
Intra-regional
Moved out % Moved in %
3.33%
1.69%
2.19%
1.45%
1.82%
1.13%
2.51%
1.85%
1.89%
1.28%
1.67%
1.07%
1.99%
1.69%
1.51%
1.24%
1.47%
1.22%
1.05%
0.93%
1.62%
1.78%
0.94%
1.20%
1.04%
1.30%
2.48%
2.93%
1.37%
1.89%
1.48%
2.05%
0.94%
1.58%
1.10%
1.79%
1.40%
2.33%
Net flow %
-1.65%
-0.74%
-0.69%
-0.66%
-0.61%
-0.60%
-0.31%
-0.27%
-0.25%
-0.11%
0.17%
0.26%
0.26%
0.45%
0.52%
0.57%
0.63%
0.69%
0.92%
Immigration in-flow
Gross in-flow %
1.84%
0.24%
0.52%
0.76%
0.38%
0.13%
0.85%
0.65%
0.92%
0.20%
0.51%
0.77%
0.21%
0.83%
0.68%
0.57%
0.72%
0.72%
0.62%
Labour Force Survey
All
Moved in %
0.19%
-0.49%
-0.17%
0.10%
-0.24%
-0.48%
0.55%
0.38%
0.67%
0.09%
0.67%
1.03%
0.47%
1.28%
1.19%
1.14%
1.35%
1.41%
1.54%
Zoom on
next page
Source: WPI Economics analysis of LFS 2006 – 2015 (Q2s)
48
A more in-depth regional picture (2)
-
Labour Force Survey
Flows of highly qualified 35-50 year olds
Intra-regional
Moved out % Moved in % Net flow %
Tyne & Wear
2.19%
1.45%
-0.74%
West Yorkshire
1.82%
1.13%
-0.69%
Rest of North West
1.67%
1.07%
-0.60%
Rest of North East
1.99%
1.69%
-0.31%
Merseyside
1.47%
1.22%
-0.25%
Greater Manchester
0.94%
1.58%
0.63%
South Yorkshire
1.10%
1.79%
0.69%
Rest of Yorks & Humberside
1.40%
2.33%
0.92%
Immigration in-flow
Gross in-flow %
0.24%
0.52%
0.13%
0.85%
0.92%
0.72%
0.72%
0.62%
All
Moved in %
-0.49%
-0.17%
-0.48%
0.55%
0.67%
1.35%
1.41%
1.54%
Source: WPI Economics analysis of LFS 2006 – 2015 (Q2s)
-
As with 18-34 year olds, there is a mixed picture within the Northern Powerhouse. Greater Manchester and
South Yorkshire again perform relatively well, seeing an intra-regional net inflow of highly skilled individuals.
-
However, in a stark difference to the 18-34 year olds, “Rest of Yorks and Humberside” performs well in
terms of a net inflow.
-
Reference to the previous slide also shows that the Northern Regions perform well compared to the rest of
the country in attracting highly qualified workers of this age group. Immigration plays less of a role for this
age group, but is still an important factor.
49
Conclusion
These data on net flows of highly qualified individuals demonstrate a number of key
trends:
-
Significant outflow of young (below 35) people with at least degree level
qualifications from all regions apart from London and the South East.
-
The picture across the Northern Powerhouse is mixed. Parts of the North East and
Yorks and Humber are particularly badly affected (large outflows). Conversely,
Manchester and South Yorkshire perform relatively well.
-
These outflows of young people are moderated by two factors:
-
-
Sizeable inflows of highly qualified immigrants from outside of the UK; and
Smaller, but still significant, inflows of older individuals with high qualifications (35+ year olds)
Considering all ages, over the last ten years:
-
There has been a net outflow of British resident highly qualified individuals from Northern
Powerhouse regions; and
-
Large inflows of highly qualified immigrants have turned this into a net inflow.
50
Why this matters
Skills Shortages and Employers
UKCESS
93%
90%
80%
70%
60%
50%
40%
of Businesses
Surveyed reported
that their business
experienced one or
more of the
following
implications due to
hard-to-fill
vacancies.
30%
20%
10%
0%
Source: WPI Economics analysis of UK Employer Skills Survey England and Local Toolkit, 2015
The majority of these issues are likely to directly constrain future
growth or innovation, either through decreased business, increased
costs, less innovation, or lower quality products.
52
How the North Compares
UKCESS
-
A lower than average percentage of Northern Companies experience significant immediate
business implications from skills shortages;
-
Stakeholders suggested manufacturing jobs cannot be moved at short-notice, meaning skills
shortages will affect long-term investment, rather than immediate business operations;
-
Long-term company growth and regional investment, could be hindered if correct steps are
not taken.
15%
Implications of Hard-to-fill
vacancies on Business
10%
5%
(Percentage Point Difference
from National Average), selected
LEPs
0%
-5%
-10%
-15%
York and North
Yorkshire
North East LEP
Lose business or orders to competitors (national average: 40%)
-8%
1%
4%
Delay developing new products or services (national average: 37%)
1%
2%
-1%
Outsource work (national average: 28%)
-6%
-2%
-4%
Withdraw from offering certain products or services altogether
(national average: 23%)
-3%
2%
-4%
Tees Valley
Greater
Manchester
Source: WPI Economics analysis of UK Employer Skills Survey England and Local Toolkit, 2015
Sheffield City
Region
Liverpool City
Region
London
0%
9%
-11%
1%
-4%
-1%
1%
1%
-1%
11%
-9%
1%
-2%
15%
-1%
0%
Skills Shortages: Causes
-
UKCESS
Compared to national averages, Northern Companies struggle more with quantity of
applicants, rather than quality. The Tees Valley and Liverpool are two exceptions to this.
Main Causes of having a hard-to fill vacancy (Percentage Point Difference from National
Average), Selected LEPs
20%
15%
10%
5%
0%
-5%
-10%
-15%
-20%
-25%
York and North
Yorkshire
North East LEP
Tees Valley
Greater
Manchester
Sheffield City
Region
Liverpool City
Region
London
QUALITY OF APPLICANTS
1%
-7%
3%
3%
-11%
-13%
12%
QUANTITY OF APPLICANTS
9%
9%
-13%
9%
7%
-4%
-12%
CONTEXTUAL FACTORS
0%
0%
2%
-23%
14%
13%
-6%
Source: WPI Economics analysis of UK Employer Skills Survey England and Local Toolkit, 2015
54
Skills Shortages: Causes due to lack of
quality applicants
-
UKCESS
When Northern companies have issues with the quality of their applicants, the reasons
broadly mirror national averages, with a few exceptions.
45%
Causes of having a hardto-fill vacancy
35%
25%
(Percentage Point
Difference from National
Average), selected LEPs
15%
5%
-5%
-15%
-25%
-35%
York and
North
Yorkshire
North East
LEP
Tees Valley
The skills you look for (National Average: 75%)
1%
-11%
12%
-4%
The qualifications you look for (National
Average: 28%)
-3%
1%
13%
The work experience that you require
(National Average: 40%)
-3%
-2%
33%
Greater
Sheffield
Manchester City Region
Liverpool
City Region
London
4%
-7%
3%
-3%
13%
5%
-3%
8%
2%
15%
-3%
Source: WPI Economics analysis of UK Employer Skills Survey England and Local Toolkit, 2015
55
Human Capital and GVA
-
Labour Force Survey
Companies and workers are more
productive and innovative in larger,
more urban environments.
More skilled individuals, densely
concentrated, leader to greater
economic gains and investment.
Human capital is strongly predictive
of population and productivity
growth.
-
Nationally and internationally, highskill areas have increased population
and pay levels, as well as the cost of
living.
-
This has boosted high-skilled cities,
and led low-skill cities to decline.
Concentration of Highly-Skilled Workers (2016)
and Per Head GBA Growth (2014)
Per-Head GVA Growth (2014)
-
5%
4%
3%
2%
1%
Northern Regions
0%
20%
25%
30%
35%
40%
45%
Concentration of Highly-Skilled Workers (2016)
The relationship between Human Capital
and GVA means that intra-regional
inequality could also increase as cities such
as Manchester and Leeds continue to grow
whilst leaving other parts of the North
behind.
Source: WPI Economics analysis of Labour Force Survey and ONS Per-Head GVA Growth, 2015
56
Explaining this Relationship
-
Glaeser and Saiz (2003) categorised three explanations for the relationship between human
capital and growth of a region or city;
-
The explanation is most likely a combination of these factors, and others, but they provide a
useful framework for thinking about the importance of highly skilled labour.
Consumer Cities
• Cities are increasingly orientated around consumption, and skills predict growth because skilled neighbours are
attractive to potential movers.
Information Cities
• Cities exist to facilitate the flow of ideas, and we should expect cities to be increasingly skills focused as the highly
skilled specialize in idea formation.
Reinvention Cities
• Cities survive by adaptation to shocks, and human capital predicts city growth because it facilitates a greater level of
adaptation.
Source: Glaeser. E. L, & Saiz. A, The Rise of the Skilled City, NBER, 2003
57
Why do people move?
Summary so far
- Slides so far have shown that, over the last ten years, regions in the
Northern Powerhouse have seen an outflow of highly qualified
individuals.
- They have also shown that this matters for the economies in the
North of England. Firms complain of skills shortages and existing
academic evidence shows the importance of a large concentration of
highly qualified workers for innovation and growth.
- This means that stemming the flow of these individuals and
attracting more highly qualified workers to the North of England
could have an important growth affect for these regions.
- The questions are then:
-
Why do people move; and
What can be done to make the Northern regions a more attractive
proposition?
59
What motivates locational choice?
-
The majority of the work to understand location decisions will be undertaken in the second
phase of this project. However, we undertook a thorough literature review of potential drivers
and conducted stakeholder interviews for the first phase.
-
Results suggest that the following factors are important for location decisions
N.b. These factors may affect subgroups of the population
differently. For example, one study
found housing was only important
for new graduate talent.
During the Stakeholder
Consultation, several staff in
recruitment mentioned that
the quality of the area,
relative affordability of
houses, and high quality of
school places were key
selling points to potential
recruits.
60
Housing play an important role
-
Polling undertaken as part of this research indicated
that housing and place play a key, but not deciding role
in graduate locational choice;
6 in 10 graduates
say the cost and quality of
housing is important to them
in choosing where they live
after graduation
This includes cost and quality, as well as aspirational
factors such as the ability to own in the future, and
lifestyle factors such as the quality of green spaces;
Source: ComRes for Homes for the North
On a scale of 0-10, where 0 = not at all important and 10 = very important, how important or
otherwise are each of the following aspects of housing to you when considering where to
live?
All
Quality of housing
Availability of housing in well-maintained neighbourhoods
How much space the house or flat has
Affordability of housing to buy
Availability of housing close to your workplace
The opportunity to own/part own your own flat/house in the area in the
future
The opportunity to own/part own your own flat/house in the area now
The quality of green spaces and local amenities (e.g. parks, libraries,
leisure centres) nearby
Affordability of rental accommodation
Availability of housing suitable for families
80
75
73
73
71
69
Source: ComRes for Homes for the North.
Recent
Early career
graduates
movers
% saying factor is important
77
83
72
79
68
79
69
78
72
71
65
73
66
64
61
59
72
69
62
51
69
46
55
56
61
But it’s one of many factors
If they were moving from current
area and choosing where to live…
55% put the
quality of jobs in
top three most
important factors
52% put the
overall cost of living
in top three most
important factors
50% put the
cost of housing in
top three most
important factors
62
North/South Differences
-
In general, when asked, people thought that prospects for graduate jobs and quality of life are better in the
South of England than the North;
-
But the North outperformed the South in terms of the availability of green space and the cost of housing;
-
Respondent perceptions were heavily dependent on where the person was from, suggesting that there are
misconceptions of the North of England and its appeal.
“I think there are really bad
perceptions of the North, the
kind of stereotypes that I don’t
think have ever really moved
on, even though life has
moved on.”
(Leeds, recent graduates)
I think some of it comes down
to identity… People know
about London. They know
about Shoreditch or Clapham
or whatever but they don’t
know, to the same degree,
about Northern cities and the
identities that they have.
(London, 25-35 London)
63
Willingness to move
The proportion who would consider
moving to the North of England for a
job with the same salary:
54% of recent graduates
49% of graduates aged 25-35
Source: ComRes for Homes for the North
Area
Manchester
Liverpool
Cumbria
Leeds
Newcastle
Durham
Sheffield
Middlesbrough
Preston
Hull
% that would
consider moving
here
56
45
42
42
42
41
41
28
26
23
-
Around half of graduates currently living outside the North of England said they would consider moving to
the North;
-
However, views varied significantly across different groups of graduates, and it’s clear urban centres were
more attractive to many people;
-
Highly qualified women were, on average, less likely to consider moving to the North of England than men.
Those in the older group are less likely to be willing to consider moving than recent gradates;
-
This was reflected in the focus groups; participants in the recent graduate group were more likely to
consider moving region.
64
What does this mean overall?
-
This suggests that housing and place could play an important part in the
location decisions of those with high qualifications.
-
However, there is unlikely to be a one-size-fits all answer to improving the
attractiveness of the housing offer.
-
There are large differences in the location decisions of younger (<35) and older
(35-50) movers and different parts of the North of England fare very differently.
-
This makes it likely that any responses to increase the attractiveness of the
housing and place offers will need to be tailored to meet the needs of different
groups of movers and be specific to the region / city / area in which they are
being considered.
-
An essential part of boosting the economic performance of the North will be
increasing the attractiveness of the North of England as a location for graduates
to live and work.
65
Contact:
Matthew Oakley – [email protected]
Guy Miscampbell – [email protected]
@WPI_Economics
www.westminsterpolicy.com
ANNEX
Net flows of movers (all working age)
-
Flows of highly qualified immigrants has hidden out-flow of Britishresident people with degree+ qualifications
Wales
South West
Northern Powerhouse
Midlands
Scotland
SE / East
London
Moved out %
2.41%
3.25%
3.24%
3.03%
1.91%
2.68%
4.05%
Intra-regional
Moved in %
1.89%
2.77%
2.81%
2.63%
1.72%
3.07%
4.56%
Net flow %
-0.51%
-0.49%
-0.44%
-0.40%
-0.19%
0.39%
0.51%
Immigration in-flow
Gross in-flow %
0.62%
0.78%
0.90%
0.73%
0.97%
1.07%
2.17%
Labour Force Survey
All
Moved in %
0.11%
0.29%
0.46%
0.33%
0.78%
1.46%
2.68%
Source: WPI Economics analysis of LFS 2006 – 2015 (Q2s)
68
Location decisions by qualification level
-
Location decisions very
different for those with high
and below-high qualifications.
Labour Force Survey
Location rank
Mid, low, no
Degree+
quals
1
13
East Anglia
2
16
West Midlands (Met County)
3
8
Rest of Yorks & Humberside
4
18
Wales
5
15
Rest of Scotland
6
14
Rest of West Midlands
7
4
Rest of North West
8
1
Inner London
9
19
Strathclyde
10
9
Outer London
11
7
Rest of Northern Region
12
3
Greater Manchester
13
20
Northern Ireland
14
11
South West
15
12
Tyne & Wear
16
17
Merseyside
17
2
Rest of South East
18
5
East Midlands
19
6
West Yorkshire
20
10
South Yorkshire
69
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71
Graphical Credits
-
Icons supplied by ‘The Noun Project’ (www.thenounproject.com) , using icons from the following creators:
- Joel McKinney (‘Right’);
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- MD Delwar Hossein (‘graduate’, ‘Line Graph’);
- Gerald Wildmoser (‘career steps’);
- Mint Shirt (‘Couple’);
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- LeftHandGraphic (‘Attach Cloud’);
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