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Financial Value Of Degree Declines As Graduates Earn Less Money, Finds HECSU Report

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UNIVERSITY DEGREE VALUE
The financial value of a degree is declining as graduates earn less | Alamy

The financial value of a degree has been brought into question after a report revealed graduate incomes have been steadily declining over the past decade, as the gender pay gap was condemned as "disturbing".

The publication reveals 40% of university leavers since 2009 are working in unskilled jobs, with an even higher number having to work unpaid. More than one in 10 graduates are experiencing "significant spells of unemployment".

The study, commissioned by the Higher Education Careers Services Unit (HECSU), has tracked UCAS applicants since 2006 and reports their experiences six years after they graduated into one of the worst recessions in history.

The graduates who responded to the survey would have paid £3,000 a year in tuition fees, so the results of the report will have an even bigger impact on those paying the full £9,000 per annum.

Although there is new evidence the decline in earnings advantage has been slower for females than males, the report shows male graduates continue to earn more their female counterparts, a gap which was evident a decade ago.

Professor Peter Elias, co-investigator at Warwick University, where the research was undertaken, called the findings "disturbing".

"Male graduates with similar qualifications, experience and in similar jobs earn more than females at the outset of their careers.

"The gender pay gap in graduate earnings that we found in a study 10 years ago has persisted and shows no sign of diminishing.

"This is one of the more continuing and disturbing findings, which underlies all of the salary analyses."

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Jane Artess, research director at HECSU says: "Graduates' perceptions of the value of their degree in finding work changes remarkably after they have been in the labour market for some time, which helps us to understand the magnitude of the downturn on this group.

"Students focus mainly on their studies while at university, particularly in their final year, so graduating into one of the worst recessions in history has hit them particularly hard."

Emma Jay Marsh, a 19-year-old who skipped university, now works in the music industry as an Artists and Repertoire scout and says "a degree is not essential":

"I like to embrace the fact I don’t have a formal education.

"My hard work and devotion has really showed people I’m not any less than they are. I feel like I have earned my place, and I get respect for that.

"I think I have more of a dedication to what I do precisely because I don’t have a piece of paper to fall back on. Also, with the cost of uni skyrocketing I’m very glad I didn’t go. I’m not in debt and I’m well on my way to a point in my career I want to be at!"

Despite the high underemployment levels, 96% of graduates still say they would "do it all again".

Artess adds: "What’s gratifying is that even in the wake of the recession, the onset of higher fees and large debts, graduates remain positive in the face of adversity with great confidence that their degree has been worth it."

Black and asian graduates are more likely to experience unemployment for six months or more after graduation, along with males, arts and design students and those with a 2:2 degree class.

A survey by career advisors Uni's Not For Me, showed only 3% of 15 to 18-year-olds believe society would benefit from more university graduates, while nearly a third believe university fails to provide a good return on investment

Founder of the company, Sarah Wrixon, added: "Regardless of cost, university is simply not the only option for success for young people today.

"There are so many fantastic alternatives to university out there, so I urge young people to take all their post-school options into account before deciding what steps to take next. I think we need to face the fact that not all degrees are equal, and many would be better off taking alternative paths into employment.

"I regularly interview graduates for my business, and in my view many of them have wasted thousands on qualifications that are of little use in the workplace."

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