The CSJ, which was founded by Conservative MP Sir Iain Duncan Smith, said about 110,000 graduates under the age of 30 now claim at least one benefit without being in work.
The latest graduate labour market statistics, published in June, external, suggest 88% of working-age graduates in England were in employment in 2024. The figure for non-graduates was 68%.
But Sir Iain said the out-of-work figures showed the consequences of an education system “obsessed” with university, which he said overlooked vocational training and a changing job market.
The CSJ said in its report that one in three British students on a university course receive vocational training.
It also said level four apprentices earn £5,000 more on average than university graduates after five years.
Daniel Lilley, a senior researcher with the CSJ, said young people needed to be given “the opportunity to succeed and fuel key industries with the domestic skills they need to grow”.
A government spokesperson said: “Graduate inactivity is at its lowest rate on record, but we’re determined to go further to support young people into work and gain the skills they need to succeed.
“Through our new Jobs Guarantee, we’re helping young people who are out of work find paid placements, with employers such as E.ON, JD Sports, Tesco and TUI having already pledged their support.
“We’re investing £1.5bn to get hundreds of thousands of young people earning or learning, including through an expansion of apprenticeships and training.
“We’ve also commissioned the former Health Secretary Alan Milburn to lead a review to get to the root of what’s holding the younger generation back, because we believe in tackling this complex issue with urgency.”
