The earnings advantage gained by university leavers has been
cut by more than a fifth overall since 2003 as a result of the economic crisis,
it was claimed.
Researchers warned that the value of a degree had steadily
declined each year, with students taking arts and humanities courses being
hardest hit.
Ministers have repeatedly claimed that an undergraduate
degree can add more than £200,000 to graduates’ average earnings over their
lifetime compared with adults who shunned university altogether.
But the report – commissioned by the Higher Education
Careers Services Unit – warned that the “relative earnings advantage associated
with a degree appears to have been declining slowly over the past decade,
possibly by as much as two per cent per annum relative to average earnings in
the economy”.
It is feared that wage premiums will decline further still
in coming years after a sharp rise in tuition fees.
Students starting courses this autumn will be expected to
pay up to £9,000 a year – almost three times the previous maximum.
The study warned that the employment market for existing
graduates was in “sharp contrast” to that witnessed a decade ago, with
university leavers more likely to face unemployment or jobs in low-skilled
industries.
“Unemployment is no longer insignificant, affecting more
than one-in-10 of graduates with many experiencing difficulty in findings jobs.
“For those that do find jobs, there is a much greater
likelihood that the job will not be a graduate job. The relative earnings of
graduates continue to decline, although compared to suitably qualified
non-graduates, a degree still confers an earnings premium.
“Student debt, incurred through tuition fees and maintenance
expenses, has been rising, an ominous sign given that [current] graduates do
not form part of the high fee regime introduced in England in 2012.”
The “Futuretrack” report analysed students who started
university in autumn 2006, the year “top-up” fees of up to £3,000 were
introduced by Labour.
The study, based on surveys of more than 17,000 students
conducted between November and February, examined how they had fared in the
labour market after graduating in 2009 or 2010.
The findings show that four-in-10 were in “non-graduate
jobs” – roles which fail to utilise their degree – 18- to 30 months after
graduation. A fifth of students with a first-class degree failed to gain
skilled employment, rising to half of students with thirds.
By comparison, just 26 per cent of students were in
non-skilled jobs after leaving university when a similar study was last carried
out a decade ago.
It also found that students who graduated in 2009 faced
higher debts, with average university leavers being required to repay £16,000.
By comparison, students who left university in 1999 had average debts of £7,960
– equivalent to £10,300 when adjusted for inflation.
In a further disclosure, one-in-10 new graduates had
experienced "significant" periods of unemployment and those from
black or Asian backgrounds or with a lower degree classification were more
likely to be affected.
These factors combined to bring down the average wage
“premium” for graduates relative to average earnings, the study found.
Overall, the premium had dropped by 21.7 per cent between
May 2003 and November 2011. But graduates with an arts degree saw their
relative earnings fall by 33 per cent, while humanities students witnessed a
slump of almost a quarter.
By comparison, the wages of law graduates were down by just
nine per cent.
Men were also more likely to be hit than women, seeing
earnings slump by 23.8 per cent, compared with 20.7 per cent among women.
Source: 7 November 2012, The Telegraph by Graeme Paton –
Education Editor
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