So now it's official. The ‘graduate premium' is a myth
Have you ever thought about the main reason why school leavers keep choosing to go to university and higher education (HE) participation rates continue rising? Of course there are many reasons; a chance for young adults to get away from their parents, ease of application and acceptance, it looks more fun than going to work, an interest in the subject… But what is the main driver that underpins society's messaging and ends up channelling 18-year-olds into university rather than the workforce? Well, it's the perception that there is a 'graduate premium'; and put simply, the narrative goes like this – 'Don't worry about the debt, you're going to get paid more to make up for it'.
And the HE sector well knows the importance of maintaining the societal belief in the graduate premium to drive up their customer numbers. They are relentless in their efforts, issuing constant public comments, articles and self-commissioned reports, often via sympathetic think-tanks, claiming the limitless powers of HE to deliver a graduate premium to all who enrol.
But this positive advertising is starting to contrast starkly with increasing evidence, now in plain sight, of graduates' difficulties getting jobs as well as the low pay on offer of not much above minimum wage. There is a growing realisation that we are burdening too many of our young adults with morale-sapping student debt for their whole working life, with little or no corresponding improvement in their career prospects. There are also concerns that we are building up a dangerous stockpile of student loans that won't be repaid, only for the taxpayer to pick up the tab. Meanwhile, money is flowing freely into the bloated HE sector via unwitting students being used as pawns.
The Government has announced a White Paper due out this summer regarding Post-16 Education. So given the importance of the notion of a graduate premium, you would assume that the Government has ensured there is robust informative data to inform policy-making. Well, sadly not. There is only one Government report, the annual Graduate Labour Market Statistics, which attempts to quantify the graduate premium; and my research shows that it is fundamentally flawed. Some will say that the IFS Graduate Lifetime Earnings report from 2020 also 'proves' a graduate premium, but my research argues that it is just as flawed.
My findings are already supported by the Royal Statistical Society, and the Office for Statistics Regulation (OSR) has also found a case in my favour and agreed that there is a problem with graduate premium data. The OSR has intervened and forced the hand of the Department for Education (DfE), who admitted in their release today that their figures are misleading – and to such an extent that even though this has been a mainstay of graduate outcome reporting since 2007, they have decided to cease publication.
The DfE have agreed that a report demonstrating the difference between the career pay outcomes of those with equivalent A-level results is necessary, and they intend to produce it as part of their LEO data e.g. comparing school leavers with three Cs who attended university and those that did not.
But the inadequacy of the data doesn't stop there. Using mathematical modelling, I've found that since we surpassed 30 per cent HE participation as long as 20 years ago, the marginal graduates added – increasingly being drawn from school leavers with relatively lower prior academic attainment – haven't earnt any graduate premium at all on average. Yet this phenomenon isn't explored in official Government statistics.
When graduates do earn a premium, there is still the age-old statistical issue that correlation does not prove causation. For the majority of graduates, the job they end up doing will have no meaningful connection to the degree subject itself. So you must question why the official Government statistics keep churning out data that implies that studying for a degree was the main causation reason for the higher earnings, whereas in fact it is more likely their pre-existing attributes such as academic ability and ambition.
Furthermore, when there is a link between the degree subject and the graduate's career, did they genuinely need to study academically for three whole years at great cost to themselves beforehand? Couldn't the course have been far shorter? And to what extent could it have been cheaper and more effective for them to start work at 18 and learn from colleagues, undergoing job-based formal and informal training in order to progress? You can often learn far more in three weeks of doing the job than you can in three years of theoretical study. The existing statistics don't explore this at all and by implication see their main role as demonstrating what degree is better than another. They act on the assumption that for non-manual work, everybody should get a 3-year degree before entering the workplace, rather than whether a degree is necessary at all.
Until now, these inadequate statistics have allowed the sector to hijack the official figures and mislead the public and Government regarding the benefits of higher education, claiming that 'everybody' will be able to benefit from the supposed average premium. What is needed is root and branch reform of graduate statistics. I believe it would provide compelling evidence that surpassing around 25-30 per cent HE participation was a monumental mistake, and we certainly should never have let it reach the existing 50 per cent.
The vicious spiral of never-ending increasing participation is condemning ever more of our young adults to pay huge amounts for unnecessary degrees. The Government's ideologically driven policies are led by a misguided false notion of 'opportunity for all'; but in the hands of a commercially-driven sector it has become a gross exercise in mass exploitation. The only way for this to end is for the Government to introduce a sensible, pragmatic cap on student numbers, calculated based on useful data – not the misleading data currently being produced.
Paul Wiltshire is a parent campaigner against Mass HE and is the author of 'Why is the average Graduate Premium falling'
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Sun
an hour ago
- The Sun
Fresh ageism row for the BBC after four axed senior journalists lodge discrimination claims
FOUR senior journalists have lodged complaints with the BBC in a fresh ageism row. Their separate — but coordinated — discrimination claims come as the broadcaster merges its home and foreign newsdesks. 2 Bosses hope slashing 130 jobs will help save £700million. But the four, said to have worked in warzones and the aftermath of terror attacks, fear they have been earmarked for compulsory redundancy. Their move follows a group of BBC News presenters going to an employment tribunal over ageism allegations. Martine Croxall, Karin Giannone, Kasia Madera, and Annita McVeigh settled their three-year dispute in March, with the terms not disclosed. The latest cases involve employees aged over 50 and thought to have more than 100 years of experience between them. Sources said they believe the process of applying for the new jobs concentrates only on their work over the past two years — and so is weighted towards younger candidates. Marks were also said to be deducted if applicants failed to mention keywords such as 'digital' or 'live page'. It is reported one of the individuals is a representative of the National Union of Journalists, which has hit out at the compulsory redundancies. Last night, the BBC said: 'Restructuring in BBC News is taking place according to established BBC policies. 'We conduct all processes in a thorough and fair manner, and we are committed to supporting our staff throughout, including through comprehensive redeployment assistance.' 2
The Sun
an hour ago
- The Sun
Labour promise to ‘end asylum hotels' is worthless… Reeves will be turfed out long before last asylum seeker leaves B&B
AS election manifesto pledges go, it was as simple and straightforward as they get: Labour will 'end asylum hotels, saving the taxpayer billions of pounds'. No wriggle room there, you might think. Not SOME asylum hotels, ALL of them. 3 3 3 And, given the current huge annual cost of housing Channel migrants, that would surely save taxpayers money. Simple! Well, sorry to be the bearer of bad — and expensive — news, but apparently not. After 11 months in office, Chancellor Rachel Reeves gave a helpful update this week on that vow to the British people during her Spending Review, and added in the teeny-tiny oh-so-insignificant caveat that it wouldn't actually happen until 2029. That's four long years away. It also means many more billions of pounds of taxpayers' money being thrown away. After all, the Government is currently forking out more than £4BILLION a year to house illegal migrants, some of whom have arrived on small boats, and even by 2029 asylum costs are STILL predicted to top £2.5billion a year — with or without a hotel room in sight. After the Tories failed to deliver on their promise to stop putting asylum seekers in hotels, we have every right to be cynical. Indeed, they were happily paying for expensive four-star rooms until that was exposed to widespread public fury. But even if Labour do actually keep their manifesto pledge by 2029, what does 'ending asylum hotels' actually mean? Let's look at the best-case scenario. Let's imagine a world where Home Office officials go to warp speed to process the massive backlog of asylum seekers who are currently waiting years to learn their fate. Will that mean we can finally stop paying for their accommodation? Almost certainly not. Windows smashed at migrant hotel as UK braces for another night of violence Although Britain already grants asylum at a far higher rate than most other European countries (indeed, it offers asylum to those who've already failed to win it elsewhere in Europe), tens of thousands of claims from undocumented economic migrants are still likely to be refused. So will that mean those failed asylum seekers will be packed off home and finally off our books? Nope. Unless their own countries agree to take them back and their safety can be guaranteed in places like Iran, Afghanistan or Eritrea, then I'm afraid they will be staying right here. What about shipping them off to third countries, like Rwanda or Albania, if they won't go home? Again, that's a non-starter under Sir Keir Starmer, whose human rights lawyer chums will have a field day arguing for failed asylum seekers' rights to a family life in Britain. Staying right here If it turns out that the thousands of young men who pay people-smugglers to get on dinghies to come to our shores are NOT in fact all brilliant rocket scientists, brain surgeons and engineers, they will probably end up working in low-wage jobs, often in the black economy, needing benefits and will likely remain a drain on taxpayers for the rest of their lives. Anyway, even if the Home Office could manage to deal with the existing backlog, what are they going to do about the thousands of new asylum seekers who are arriving from the beaches of Calais every week? This year has so far seen the highest ever number of illegal immigrants crossing the Channel, with no sign — despite Sir Keir Starmer's promises — of the smuggling gangs being smashed any time soon. It doesn't really matter where these people live; once they set foot on our beaches, we will end up footing the bill one way or another Julia Hartley-Brewer OK, fair enough, but at least by 2029 we won't be paying for these new arrivals to live in hotels any more. True, but they will need to live somewhere. Unless the Government is secretly planning to send them off to the Falklands or give them all tents and plonk them in a field in the middle of nowhere, that means paying for their accommodation and other living costs. If officials are not going to pay for hotels, then more and more asylum seekers will end up being moved into private rented flats and houses in a street near you. This is already happening in many towns and cities, as companies such as Serco, Mears and Clearsprings have been handed multi-million pound contracts to strike deals with local landlords to house asylum seekers. Hope we won't notice Using our hard-earned taxes, they often pay far above (sometimes even double) local market rents, with guaranteed leases for five years, with all utilities and any other costs paid for by taxpayers, and pushing rents beyond the means of countless local families. Getting asylum seekers out of hotels also brings the added bonus that the cost of thousands of individual private rentals are rather easier to hide from the public than enormous Home Office hotel bills totalling billions. And after the Channel migrants are processed and allowed to stay — with or without asylum status — they can then be quietly shunted on to the general benefits bill or on to local councils' housing costs in the hope that we won't notice or care any more. Like so many manifestos, the promise to 'end asylum hotels' isn't worth the glossy paper it is printed on. It doesn't really matter where these people live; once they set foot on our beaches, we will end up footing the bill one way or another for years to come. We don't know how many more Channel migrants will turn up this week, this year or by 2029, so we can't know how much that bill will be. But the one thing we can say for certain is that Rachel Reeves will be turfed out of the Treasury long before the last asylum seekers are turfed out of their hotel. HOMELESS TENT CITIES ON WAY DON'T look now but the Deputy Prime Minister, Angela Rayner, has had another brilliant idea. This time, her clever plan is to tackle the rising problem of rough sleeping on our streets by decriminalising it. She plans to repeal the 1824 Vagrancy Act which, for two centuries, has made it a criminal act to sleep rough, raising fears that we will soon see tent cities pop up in our parks and streets, similar to those in San Francisco. Ms Rayner says these people are not criminals but 'vulnerable' victims of 'injustice'. Indeed, this is true for many. In the first three months of this year, 4,427 people spent at least one night sleeping on the streets of our capital. Many of them are drug addicts or alcoholics, while others are service veterans who are victims of both PTSD and a bureaucracy that just doesn't care. Making it easier for people to sleep on the streets won't solve THEIR problems – but it will create more problems for everyone else.
Sky News
an hour ago
- Sky News
Rachel Reeves 'a gnat's whisker' from having to raise taxes, says IFS
Rachel Reeves is a "gnat's whisker" away from having to raise taxes in the autumn budget, a leading economist has warned - despite the chancellor insisting her plans are "fully funded". Paul Johnson, director of the Institute for Fiscal Studies (IFS), said "any move in the wrong direction" for the economy before the next fiscal event would "almost certainly spark more tax rises". Speaking the morning after she delivered her spending review, which sets government budgets until 2029, Ms Reeves told Wilfred Frost hiking taxes wasn't inevitable. "Everything I set out yesterday was fully costed and fully funded," she told Sky News Breakfast. Her plans - which include £29bn for day-to-day NHS spending, £39bn for affordable and social housing, and boosts for defence and transport - are based on what she set out in October's budget. That budget, her first as chancellor, included controversial tax hikes on employers and increased borrowing to help public services. 3:43 Chancellor won't rule out tax rises The Labour government has long vowed not to raise taxes on "working people" - specifically income tax, national insurance for employees, and VAT. Ms Reeves refused to completely rule out tax rises in her next budget, saying the world is "very uncertain". The Conservatives have claimed she will almost certainly have to put taxes up, with shadow chancellor Mel Stride accusing her of mismanaging the economy. Taxes on businesses had "destroyed growth" and increased spending had been "inflationary", he told Sky News. New official figures showed the economy contracted in April by 0.3% - more than expected. It coincided with Donald Trump imposing tariffs across the world. Ms Reeves admitted the figures were "disappointing" but pointed to more positive figures from previous months. 7:57 'Sting in the tail' She is hoping Labour's plans will provide more jobs and boost growth, with major infrastructure projects "spread" across the country - from the Sizewell C nuclear plant in Suffolk, to a rail line connecting Liverpool and Manchester. But the IFS said further contractions in the economy, and poor forecasts from the Office for Budget Responsibility, would likely require the chancellor to increase the national tax take once again. It said her spending review already accounted for a 5% rise in council tax to help local authorities, labelling it a "sting in the tail" after she told Sky's Beth Rigby that it wouldn't have to go up.
