June 01, 2005

Costly University Degrees

The Financial Times ran this story on Monday about the falling returns to a university degree due to the glut of new entrants into the higher education system. This is unlikely to be surprising to anyone, but it never hurts to have studies put forward figures to illustrate the point.

Graduates can now expect to earn an average £140,000 more over their lifetimes compared with those who choose not to go to university; down from the previous estimate of £400,000.

The BBC also coments on the issue, saying

Maths or computing degrees made the biggest difference to earnings, adding £222,419 for men and £227,939 for women.

However, arts subjects meant just 22,458 more over a lifetime for men, compared with A-level leavers.

Dr O'Leary [Swansea University professor] said this could actually mean a loss of earnings, when tuition fees and living costs at university were taken into account.

This highlights the importance of thinking carefully about subject choice and not thinking University is something that must be experienced at all costs. I don't believe subjects which bring greater wages are inherently better, or more useful, but teachers shouldn't allow 6th formers to have unrealistic expectations about such financial issues. Additionally, it makes questionable the claim that taxpayers should be supporting prospective students, given the huge variabiliy in returns to different subjects and in degrees from different institutions.

See the Financial Times article here.
See the BBC News article here.


- 2 comments by 1 or more people Not publicly viewable

  1. Bah, and to think I chose History over CompSci!

    01 Jun 2005, 22:05

  2. Dr O'Leary appears to makes a very basic mistake .
    Living costs are NOT a cost of going to University, since you pay to live whether you go or not, it is not a cost of going to University.

    I'm a crap economist and I know that!

    01 Jun 2005, 22:26


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