Are graduates from the top universities choosing finance and tech over the public sector?

The past couple of decades have witnessed substantial growth in the finance, tech and consulting industries. At the same time, the public sector has seen an extended period of pay restraint. These twin trends have led to warnings of a ‘brain drain’ from the public sector (Mazzucato and Collington, 2024; van Teutem, 2025).

A new iteration of an IFS working paper uses educational records linked to employer data to track how the industries entered by top-university graduates, and the pay they offer, have changed over time. This comment summarises the key findings. Previous work has examined public sector trends across all education groups; the focus here is on graduates from England’s five most selective universities in terms of the GCSE grades of their entrants (the names of those universities are not disclosed, to meet the data source’s privacy requirements).1 We refer to these as the ‘top five universities’.

Finance, tech and consulting are growing destinations for graduates from the top five universities

Figure 1 shows the share of university graduates entering tech, finance and consulting in the first year after graduation, among those who are employed in that year and across graduation cohorts.2 It shows that, over time, an increasing share of graduates going into work from the top five universities have entered these lucrative destinations, whereas the change for all university graduates has been more modest.

The share of graduates going into finance dipped during the financial crisis, but for graduates from the top universities, the dip was short-lived. By 2012, finance was already drawing a higher share of employed graduates from the top five universities than before the crisis, and the share remained broadly stable at around 10% thereafter. By contrast, among graduates overall, entry into finance had not returned to its pre-crisis level by 2019.

Tech has also become a more important first destination for graduates from the top universities. The share taking their first job in software development, data or IT services nearly doubled, from around 4% among the 2008 cohort to 8% by 2019.

Finally, more graduates from the top universities have gone into consultancy – defined here as management consultancy and related business advisory activities. In 2008, consulting attracted 3% of graduates from the top five universities; by 2019, that figure had risen to 8%.

In total, among employed graduates of the top five universities, 17% of the 2008 cohort entered one of these three industries. By 2019, that share had grown to 27%. Conversely, among all university graduates, there was no overall rise: the share entering any of the three industries was 13% in both 2008 and 2019. This means that these industries are attracting the same share of graduates, but this is increasingly skewed towards graduates of the top universities.

Public sector trends

This recruitment of top-university graduates into high-paying private sector industries could, in principle, pull graduates away from the public sector. In 2008, top university graduates entering the public sector earned on average 1% more than those entering any private sector job. By 2012, this pattern had reversed, with private sector entrants earning 9% more. And by 2019, that gap had widened to 12%.

To study this, we again examine graduates who are employed in their first year after leaving university, and calculate the share that work in the public sector. We repeat the exercise for those who finish education following A levels or GCSEs. To aid comparability, we index the shares to 2008.

Figure 2 presents the results. The financial crisis and its immediate aftermath led to relatively similar patterns for those with different educational qualifications. The crisis briefly raised the share of employed education-leavers working in the public sector, reflecting a contraction in private sector graduate hiring rather than a substantial expansion of public sector hiring. The public sector share then fell rapidly until around 2012.

The pattern over the rest of the 2010s differs substantially across education groups. The share of employed graduates from the top five universities entering the public sector grew significantly, leading to the public sector share among 2019 graduates only modestly below that among 2008 graduates. The underlying shares (not shown in the figure) were 14% in 2008, 9% in 2012 and 13% in 2019. That is – and as shown in Figure 2 – the share of top-university graduates entering the public sector declined by one-third (from 14% to 9%) between 2008 and 2012, but by just 9% between 2008 and 2019 (from 14% to 13%).

In contrast, growth in the public sector share from 2012 onwards was weaker among graduates from middle-ranked universities, and weaker still among those whose highest qualifications are A levels. And for those whose highest qualifications are GCSEs, the public sector share has continued to fall. Some of these trends will be driven by changing composition: as the number of people leaving education with only GCSEs continues to fall, the composition of that group – and thus their average likelihood of entering the public sector – may change.

Figure 3 breaks down public sector entry for graduates from the top five universities by destination area within the sector, showing the shares entering central government, local authorities and the health sector in their first year after their studies. It shows that the early 2010s decline in public sector entry was mainly due to falling entry into local authorities, which were particularly affected by funding cuts. The recovery in the second half of the 2010s, by contrast, appears to have been driven primarily by central government: the share entering central government rose steadily from 2012 onwards and, by the start of the pandemic, was slightly above its pre-crisis level.

Conclusion

While entry into newer sectors such as tech and consulting has risen, the public sector remains an important destination for graduates from top-ranked universities. In other words, it is other (typically lower-paid) private sector industries that have attracted a lower share of top-university graduates in response to the growth of these high-paid sectors. This provides evidence against the hypothesis of a ‘brain drain’ from the public sector – in fact, the reduction in the public sector share at entry into employment is biggest for those with lower qualifications.

Explore the data across sectors in the interactive chart below.