The economic benefits of a degree
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New report reveals its findings |
Recent newspaper reports based on a survey carried out by PriceWaterhouse Coopers suggest that certain types of degree can improve your career and wage earning potential considerably. As Professor Drummond Bone, President of Universities UK points out in his Foreward, these are exciting times for anyone embarking on a period of University study.
The introduction of tuition fees of up to £3,000 a year for full-time undergraduates in England in 2006 has revitalised the debate about the benefits of a degree to the individual. As a contribution to this discussion Universities UK commissioned PricewaterhouseCoopers (in association with London Economics,) to produce a report on the benefits of a degree drawing on recent research including its own. The findings confirm that there are significant economic benefits (as well as substantial non-financial advantages) to obtaining a degree and these amount to an additional £160,000 over a working lifetime compared with an individual with two or more A-levels. This represents a difference of up to 25% between the two groups. There will be additional financial benefits from the possession of postgraduate qualifications. At the same time the report recognises that these figures will vary according to degree subject, qualification type and age of attaining the qualification. The financial benefits also vary according to socio-economic background: men from lower socioeconomic groupings and families with relatively lower family income do particularly well from attaining higher education qualifications. The report also covers the financial benefit to the taxpayer of university education. This is a calculation based on the costs and benefits to the State of providing higher education. The latter include substantial tax benefits accruing to the Exchequer, particularly later in a graduate’s working life, as earnings and related taxation payments increase. Another important conclusion of the research – despite much speculation to the contrary – is the fact that there has been no erosion of the financial benefit of a degree even though there has been a substantial increase in the supply of graduates over the last 15 years. There has been a matching increase in demand in the economy for highly trained individuals. In Britain’s knowledge-based economy there is every prospect that this demand will continue to grow in the future, a conclusion also reinforced by the OECD’s report Education at a Glance 2006. The report also challenges the view that the recent increase in student fees in England reduces the financial benefit of a degree to the individual. In fact the report shows that the opposite is true. The reason is that the increased public subsidies associated with student loans more than offset the deferred cost of larger loan repayments made many years after graduation. The message from this report is clear: taking a degree remains an attractive personal investment that will produce significant long-term financial gains and many other benefits for the individual graduate.
Professor Drummond Bone
President, Universities UK
You can read the report in full by viewing this PDF:
08/02/07
