Too much higher education

If prices are falling then we\’ve a sign that there\’s over-production relative to demand.

The pay premium earned by postgraduates and those who take masters degrees is in decline as the market becomes flooded, research suggests today.

The study, commissioned by the British Library and the Higher Education Policy Institute (Hepi), found that the benefit of taking another qualification after graduating was decreasing.

Graduates taking a postgraduate course in 2003 earned, on average, 18 per cent more than peers who had obtained a first class degree and 31 per cent more than those who achieved a 2:1.

But by 2008 this had fallen to 15 per cent and 27 per cent respectively.

As prices are falling then we\’ve over-production relative to demand.

Thus we\’ve got too much higher education and should have less of it.

5 thoughts on “Too much higher education”

  1. Er Tim, arent you looking at this in a one sided way? If I, as a company, find that the price of the raw material I need (in this case educated people) is falling, this is a good thing is it not? I become more profitable.

  2. It doesn’t mean that at all. As long as there is a premium, it means there isn’t enough of it (it’s a bit more complicated than this as the the premium has to cover the cost of doing it, and there are externalities, but certainly you’re wrong on the direction thing).

  3. Many BSc graduates are taking MScs besayse they couldn’t get any job with the BSc. For them the value of the MSc is significant. Often the MSc is in a more marketable subject area than the first degree.

  4. Depends a lot on why it’s happening. A non ordered, non exhaustive list:
    Employers may have discovered that MSc graduates aren’t much more useful than BSc graduates.
    The number of MSc graduates may have increased
    The number of jobs requiring that level of education may have reduced.
    Could be any mixture of the above.

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