Cutbacks in the public sector will hit graduates hard and more job opportunities with private sector employers must be created for university leavers, Centre for Cities has warned.
Research by the think-tank has revealed more than half of all UK graduates find work in the public sector, with this figure rising to 67% for postgraduates.
The Centre for Cities report predicted 290,000 public sector jobs would be lost by 2014, while one in four workers in UK cities are employed in this sector.
In total, 69% of the 1.2 million jobs created in UK cities between 1998 and 2007 were in the public sector.
The think-tank warned the government that unless more was done to increase graduate opportunities in private sector companies, unemployment among graduates would continue to rise.
Dermot Finch, chief executive of the Centre for Cities, said: “In a public spending squeeze, UK graduates will continue to find it tough to take their first step on the employment ladder.
“The public sector will not drive graduate jobs growth over the next decade. This means more private sector job opportunities will be needed to bridge the gap.”
The report found Tyne and Wear, Birmingham and Leeds have seen the biggest increases in graduate unemployment this year, with out-of-work graduates having nearly doubled in Tyne and Wear in the past 12 months.
In 2009, 22,500 applicants applied for all the Civil Service Fast Stream programmes, up from 16,858 applications the year before.