This does not prove what you think it proves

Research conducted by the Resolution Foundation, and endorsed by Willetts, shows that the importance of having a degree has increased over time, in defiance of the assumption that the more highly educated people there are, the less valuable their qualifications. In the noughties, the fewer qualifications you had, the harder it was to maintain good earnings. Higher education improves your chances of finding a remunerative, enjoyable line of work.

There are two entirely different concepts being discussed here.

1) Does tertiary education likely lead to higher incomes for those with tertiary education?

2) Does having more people with tertiary education lead to lower wage premiums for those with tertiary education?

It\’s entirely possible that both are true: that there is a premium to having a university degree but that premium is declining.

Which is, pretty much, what you\’d expect to be happening actually. As the supply of something increases the market clearing price of that things fall, unless we\’ve got something really very strange going on (Giffen Goods and all that sort of stuff). Equally, if something confers a privilege and more people have that something we\’d expect the number gaining that privilege to rise.

Now, what actually seems to have been happening is that 2) is very definitely true. So much so that 1) is only partially true. Various people have been saying that an arts degree for a male (subject to the usual caveats, an arts degree for a male from Cambridge might not do this yet but English Lit. from a fourth tier place probably does) has a negative net present value…..in purely economic terms that is. The cost of the course, the years out of the workforce and not earning, are greater than the extra (if any) wages earned over the working life.

7 thoughts on “This does not prove what you think it proves”

  1. So Much For Subtlety

    “The cost of the course, the years out of the workforce and not earning, are greater than the extra (if any) wages earned over the working life.”

    Not to mention that Higher Education can and does ruin people’s work ethic. Some people are just unemployable and I suspect their Higher education has something to do with it.

  2. The situation may be more complicated than we think.
    A degree from Luton or Bournemouth might have little value in the UK but attract a considerable premium in the graduate’s home country. The difference between a redbrick and an Oxbridge degree might be significant, except (for example) where employers think PPE is a bit media studies. And so on.
    And was Theology ever a paying proposition?

  3. And was Theology ever a paying proposition?

    Oh, yes. The life of a country vicar, CofE, could be quite comfortable in the 19th Century.

    I’d say there is a third factor as well – idiot HR people who use degree / no degree as a sift for jobs that really don’t require degree-level knowledge or, as far as degrees now do, research skills.

  4. The big shift in many professional fields is towards requiring a postgraduate degree, although even here this is often pure credentialism.

    The social mobility consequences of this are pretty horrendous – undergraduate education in this country is basically financially accessible to all* despite all the fuss about the Evil Fascist Fees, but grad school is not. If by subsidising millions of people to get a bachelors degree, we’ve merely made a masters the new bachelors (signalling theory and all that), but this time unaffordable to most people, then we have severely ballsed this up.

    * exceptions – those who can’t grasp that student loans are essentially a graduate tax with inflation-adjusted adjusted cap on maximum repayments rather than debt in the traditional sense (what other debt has income contingent repayments, zero repayments during career breaks or periods of part-time work, and such generous write-off terms?), and who are strongly debt averse. People from lower socioeconomic backgrounds, and some religious groups (eg muslims) seem more dissuaded than most. However there are still options of parttime study and working instead of borrowing to pay the fees, and in some cases scholarships and university financial support. This stuff is less generous and fees usually steeper at the grad school level.

  5. Re Theology.
    My other half (senior executive for a large Pharma company) did mention a few months ago in passing, that out of the current graduate intake, several of her colleagues had a preference for Theology graduates on the basis that they demonstrated a strong ability to concentrate for extended periods without switching to see what their MySpaceTwitBook feeds were saying…

    (On a side note – the CTO at my current employer was a Philosophy graduate)

  6. What of the affirmative actiuon effect?
    Perhaps it might be better for a white heterosexual male to become an apprentice plumber or some such.

Leave a Reply

Your email address will not be published. Required fields are marked *