Graduates in England typically earn more through
their lifetime compared to those who could have continued in
education but chose employment instead, new analysis of
government data has found.
The analysis by Universities UK of data that tracks earnings from
the age of 17 to 31 , shows most graduates rapidly catch-up with
and overtake non-graduates, despite having fewer years in the
labour market, and this difference is sustained throughout their
careers. The salary difference increases throughout their
careers, even after the costs of studying – and higher taxes -
are factored in. Graduates earn more than non- graduates
across all regions of the country, where our universities are
located. This regional perspective helps take into account local
labour markets.
Crucially, these differences are not reflected in the
government's metrics for assessing course success. Currently, the
measures used by the Office for Students only go up to 15 months
after graduation – therefore not taking future progression into
account.
Welcoming the new analysis, Vivienne Stern MBE, Chief
Executive of Universities UK said:
“This new analysis shows choosing a degree really does pay off
for most graduates, and that if you learn more, you are likely to
earn more throughout your working life. With the potential to
significantly increase earnings wherever you live or sector you
work in – including the arts and media – this data clearly
demonstrates that salary growth for graduates is a marathon, not
a sprint.
“A university education continues to pay dividends,
throughout an individual's career. With exceptionally
positive outcomes for students from less advantaged backgrounds,
it is clear universities do provide an essential opportunity for
individuals to reach their potential wherever you are in the
country. We continue to call for an uplift in maintenance
support, including grants for those who need them the most.”
The new analysis compared earnings for graduates with
contemporaries who held the right qualifications to enter higher
education but opted to seek employment instead. The new figures,
based on government data linking student and tax records, show
that on average:
- Graduates overtake those who chose not to go university
within just a few years, earning at least 20% more once they are
in their mid-20s. By age 31, graduates typically earn 37% more,
and the gap is slightly higher (38 %) for those from economically
deprived areas
- Graduate earnings increase at a faster rate than those of non
graduates Between the ages of 23 and 31 average earnings grow by
72% for graduates compared to 31% for non graduates. For those
who were previously on Free School Meals average graduate
earnings growth is 75% compared to 26% for non graduates.
- Graduates aged over thirty are more likely to be in work, and
far less likely to be claiming benefits, than those without a
degree.
- On average for the tax year2020-21, graduate earnings are
higher than earnings for non-graduates in all regions.
On average, earnings for graduates are higher over time
regardless of socio-economic background. Graduates from a
free school meals background will typically earn over a third
more than non-graduates (who could have gone to university but
chose not to) from the same background by the age of 31.
Again, on average, those who could have chosen university but
opted to seek employment instead are more likely to be claiming
out-of-work benefits by age 31. This is twice as likely in the
North West (2% of graduates and 5% of non-graduates claiming out
of work benefits), and up to four times as likely in some parts
of the country (such as the South West, South East, East Midlands
and East of England where 1% of graduates claim benefits compared
to 4% of non-graduates).
Vivienne Stern continued:
“Earnings are not the only measure of a valuable degree – and
lots of people choose careers because they care about them, not
just for the money . However, this new analysis conclusively
shows that it is overwhelmingly worth getting a degree.
Degree apprenticeships are not an alternative to higher
education. Instead, degree apprenticeships are a form of higher
education delivered as a partnership between employers and
universities. .
The analysis also shows that the current metrics used to measure
graduate success do not reflect the full value of a university
degree to individuals and local areas. Measures, such as those
used by the Office for Students, that look at employment outcomes
15 months after graduation, offer only an initial snapshot. This
new analysis show how necessary it is to look at the longer-term
impact when evaluating the ‘value' of university degrees.
