University brings massive boost to earnings and economy
New data shows female students who progress to university can expect to boost their lifetime earnings by £250,000, and men by £165,000.
University study delivers huge benefits to both graduates’ earnings and the wider UK economy, Universities and Science Minister David Willetts will announce today.
As hundreds of thousands of students get their A Level results new data published by the Department of Business, Innovation and Skills shows female students who progress to university can expect to boost their lifetime earnings by £250,000, and men by £165,000.
University study is also shown to contribute significantly to the economy, with around 20% of the UK’s economic growth between 1982 and 2005 attributable to an increase in the number of graduates, as well as at least one third of the increase in labour productivity from 1994 to 2005.
Universities and Science Minister David Willetts said:
“As students discover their A Level results this new data highlights just what a great long-term investment university is.
“A degree remains one of the best pathways to achieving a good job and a rewarding career – as well as a hugely enjoyable experience for most students. What is more, there is a real incentive for working hard, because the research finds that gaining a higher degree classification boosts earnings even further.
“And the benefits of university go beyond individual graduates, with the economy greatly enhanced by having a highly-skilled university-educated workforce.”
The research on graduate earnings confirms previous findings showing a substantial financial benefit from gaining a degree. Over her working life the average female graduate will earn £250,000 more in today’s valuation, net of tax and other costs, than a woman with two or more A Levels who does not continue into higher education. For men the figure is £165,000.
This highlights that the regularly quoted average graduate premium of comfortably over £100,000 still holds, despite the substantial increase in graduates and a changing labour market.
Notes to editors:
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You can find ‘The Relationship Between Graduates and Economic Growth Across Countries’.
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Some further analysis can be found at ‘The Impact of University Degrees on the Lifecycle of Earnings’.
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The government’s economic policy objective is to achieve ‘strong, sustainable and balanced growth that is more evenly shared across the country and between industries’. It set 4 ambitions in the ‘Plan for Growth’, published at Budget 2011:
- to create the most competitive tax system in the G20
- to make the UK the best place in Europe to start, finance and grow a business
- to encourage investment and exports as a route to a more balanced economy
- to create a more educated workforce that is the most flexible in Europe.
Work is underway across government to achieve these ambitions, including progress on more than 250 measures as part of the Growth Review. Developing an Industrial Strategy gives new impetus to this work by providing businesses, investors and the public with more clarity about the long-term direction in which the government wants the economy to travel.