This is - University of Warwick

This is - University of Warwick

Education, achievements and labour market outcomes A presentation to the Graduate Labour Market Forum, 15th December 2003, Westminster, London Peter Elias, University of Warwick Kate Purcell and Nick Wilton, University of the West of England Does it pay to go to university? How has the premium associated with a first degree changed over the last 15 years? What factors are associated with higher earnings? What other benefits do we find associated with higher education? How are women faring relative to men? How has the premium associated with a degree changed over the last 15 years? Previously we showed that there was

some evidence of a decline in the graduate earnings premium, but still significant and major differences in the rate of growth of earnings of graduates compared with non-graduates What kind of earnings growth would we expect? What is the average real rate of growth of earnings for young degreeholders and non degree holders? Use Labour Force Survey (1993-2000) to determine the average annual rate of growth of real earnings between ages 22 and 29 (full-time gross weekly earnings) Degree No degree Men 9.7% p.a. 5.3% p.a.

Women 7.9% p.a. 4.9% p.a. Average annual rate of growth of real earnings by gender 9 8 7 6 5 1980 Graduate 1995 Graduate 4 3 2 1 0

Female Male Average annual rate of growth of real earnings by age 8 7 6 5 1980 Graduate 1995 Graduate 4 3 2

1 0 31 years or below 32 to 37 years 38 years and older Average annual rate of growth of real earnings by type of institution attended 9 8 7 6 5 1980 Graduate 1995 Graduate 4

3 2 1 0 Pre 1992 University Post 1992 University HE College Average annual rate of growth of real earnings by subject studied Law Maths & Computing Business studies Social Sciences Engineering Medicine & related 1980 Graduate 1995 Graduate Humanities

Other vocational Natural Sciences Interdisciplinary Languages Arts Education 0 2 4 6 8 10 12 14 16

18 Distribution of average annual growth rates of real earnings, 1980 graduates and 1995 graduates 20 18 16 1980 Graduate 14 1995 Graduate 12 10 8 6 4 2 0

What factors are associated with higher earnings? Conducted a detailed multivariate analysis of the variations in earnings of graduates in fulltime employment in 2002/03 (excluding those aged 38 and over) Tested for variations associated with social class, entry qualifications, class of degree, post graduate qualifications, type of institution, age, gender, a range of job characteristics and family situation What factors are strongly related to variations in earnings? Working hours (1% per hour) Degree required (18% addition) Sector (ICT, banking, business services 15%) Private sector (10% more than public sector) Size of firm (10% less if only 1-9 employees) Age (10% more per year) Disability (10% less)

What factors are strongly related to variations in earnings? (contd.) Class of degree (12% less for a third class) Subject studied (Arts -17%, languages -9%, maths & computing +9% relative to social sciences) Entry qualifications (<16 UCAS points -6%) Lives in London and SE (+26% for Inner London) Postgraduate qualification (see next slides) SOC(HE) (see next slides) The London premium (relative to graduates working in the rest of the UK 30% 25% 20% 15% 10% 5%

0% Inner London Outer London South East Well the City definitely is linked in with financial reward I mean thats very clear, I mean one of the problems I face now is I could step out of the City into a corporate role but looking at the salaries that are paid, its horrendous, you know were talking a lifestyle change which Im not entirely keen to make. (Freelance finance consultant, graduated in Russian and German from old university, male age 31) Courses taken since 1995 35

30 Male Female 25 20 15 10 5 0 Taken short job- Taken u/g degree Taken postgrad related course since graduating? cert/dip since since graduating? graduating? Taken prof. qual

prog. since graduating? Taken Masters degree since graduating? Taken PhD since graduating? Taken other course since graduating? Postgraduate qualifications, training and earnings Short course(s) % change relative to those who took no courses 6% 4%

2% 0% -2% -4% -6% -8% -10% Undergraduate Postgraduate degree cert. or dip. Professional qualification Master's degree

Phd Programme Other Earnings premium by SOC(HE) - relative to graduates in non graduate jobs % increase in earnings relartive to nongraduate jobs 20% 18% Men 16% Women 14% 12% 10% 8%

6% 4% 2% 0% Traditional graduate job Modern graduate job New graduate job Niche graduate job What about social class and gender? Social class is not directly associated with variations in earnings effects are indirect but, fee-paying school still adds 5% seven years after graduation! Type of university attended does have some impact, but only for very small number of

institutions Gender differences remain (8% more for men) In my workplace, my type of work is done... % of young men or women in full-time employment 45 40 +7% 35 -8% 30 25 20 Male Female

15 10 5 0 almost exc by men mainly by men a fairly equal mix mainly by women almost exc by women Overall satisfaction with career to date (- those in full-time employment only) 80

Very satisfied Reasonably satisfied 70 Not satisfied* 60 50 40 30 20 10 0 < 9,999 10,00011,999 12,00014,999 15,00017,999 18,00020,999

21,00023,999 24,00026,999 27,00029,999 30,00032,999 *Combining 'Not very satisfied' and 'dissatisfied' 33,00035,999 36,00039,999 40,00049,999 50,00059,999 60,000 + What about the future? At the point I am at now, if I wasnt having a baby, I may well have looked or be looking for another job in the next 6

months, purely because Ive been promoted from within and they never reward you adequately. They never give you the same salary as they would if they recruited externally. I am dissatisfied with my salary at the moment, but I cant really say anything to the people I work with because I am maternity leave and theyve known I would be going on maternity leave for quite some time. Its going to be something I am going to have to address when I get back. (Merchandising manager working for global corporation, graduated in business & financial services, female age 29)

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