Researchers found that the vast majority of graduates with a degree are earning more at the age of 29 than those who do not go to university. The study shows that there continues to be a graduate premium and that women benefit from this premium the most.
Data shows that female and male graduates are earning 28% and 8% more on average than their counterparts who opted for a different route of study after leaving school. As graduates’ earnings rise more quickly during their early and mid-careers, particularly for men, it is expected that returns will increase further once looked at over a lifetime.
The research, which will help policy makers, regulators and students understand the different outcomes from different courses and universities, also shows that a number of institutions deliver negative financial outcomes for approximately 4% of male and 0.4% of female students. That is to say, graduates from these institutions earn less than the average person with similar A Level grades who did not go to university at all.
There are several possible reasons for this:
- Students choosing to study courses that have a high social value when in employment, but not necessarily high wages
- Students opting to study subjects such as creative arts, drama and music with low proportions of people going on to earn high salaries.
- Students attending a university in a part of the country where wages are below the national average, who then stay in that area, adding to its economy, but not necessarily earning as much as they could elsewhere.
But there are still cases where students aren’t necessarily choosing the institution that will deliver the best returns for their course. The study shows how for some studying the same subject at a different institution – or indeed continuing their education at an alternative to university – could significantly increase their future earnings and career prospects.
Financial outcomes are of course just one of the considerations that students have when choosing a university. The benefits of higher education are not limited to increasing a graduate’s salary. For example, many people will wish to pursue public service, third sector careers or the arts which have a very high social value, but which aren’t necessarily amongst the most highly paid.
The Office for Students is already using its powers to tackle institutions with poor student outcomes data, imposing additional registrations conditions on university including London Metropolitan University and Bolton University in response to specific concerns.
Concerns were raised with Bolton over employment outcomes for PGCE students, while London Metropolitan were criticised over professional employment for undergraduates, and postgraduate progression. Both are now required to construct an improvement plan around their continuation and completion rates.