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Firms which give undergraduate financial assistance in the form of sponsorship, in the hope of picking high‐flyers early on and improving the match between graduate output and employment needs, will come under the microscope in new research launched by the Institute of Manpower Studies and being conducted under a £55,000 grant from the Leverhulme Trust. With financial cutbacks restricting numbers in higher education, a close relationship between students, teaching institutions, and employers has become vital. The role of sponsorship in encouraging students to take up particular subjects, such as engineering, also has an obvious national importance. This new research by the IMS Labour Market Studies Group will examine: