The value of higher education goes far beyond a good job

As participation in higher education grows, we continue to hear the argument from certain corners that too many people go to university. It is a point often made by those who went to university themselves, and by those who aspire to have their own children access the benefits higher education affords. Despite this rhetoric, the appetite for higher levels of education does not seem to diminish.

The United Kingdom, for example, has one of the highest tertiary attainment rates in the OECD, but is not alone in seeking to increase its share. As more countries move towards ‘mass’ higher education systems, we have a responsibility to regularly re-examine the evidence to check that our assertions on the value of continued expansion still ring true.

Here – with a focus on the UK system – we lay out a simple argument: the expansion of higher education has been an unequivocally good thing; it has been necessary for both economic and equity reasons. However, it may be time to rethink how we measure value.

The narrow view of employment outcomes and earnings does not paint the full picture. If we are to continue to make the case for expansion, we must deepen others’ understanding of the multiplicity of benefits to the individual and the wider world.

This article will still only scratch the surface of higher education’s wider value. We do not, for example, explore the impact of world-changing research and development, or the community and global cohesion our institutions foster.

Benefits for individuals and government

The OECD’s Education at a Glance tells us that 86% of adults with tertiary education are employed, compared to 77% with upper secondary education. They are also likely to earn more than people without a degree: adults in the OECD with a bachelor degree earn on average 43% more than those with an upper secondary qualification.

Other studies have shown that graduates enjoy non-financial benefits too, including better health and longer life expectancy.

It is not just the individual who benefits. In the United Kingdom, on average, the Treasury makes a considerable profit on each graduate. In 2020, the Institute for Fiscal Studies found that each graduate has a lifetime exchequer return (ie, the net they give back to the taxpayer due to higher earnings, minus how much the public purse ‘spends’ on them) of £110,000 (US$141,000) for men, and £30,000 for women.

Because graduates are more likely to be employed than non-graduates, they also call less on state support – for instance, data shows that 15 years after key stage 4 (usually completed by age 16), just 2% of graduates receive out-of-work benefits, compared to 11% of non-graduates.

Better health, a greater propensity to volunteer and the intergenerational effect of graduate parents supporting children who do better at school all have a quantifiable benefit to the country.

Graduates benefit the wider economy

Beyond that, it is also clear that higher rates of participation benefit the economy. Research by the United Kingdom’s Department for Education shows that skills and labour have been the only factor making a persistent and positive contribution to productivity in the last few years. There is evidence that continued higher education expansion is needed to meet the needs of the evolving labour market.

A recent study predicted that the United Kingdom will need more than 11 million extra graduates by 2035, and that 88% of new jobs will be at graduate level. This imperative to meet skill needs is not unique to the United Kingdom; there is evidence that the workforce within lower-income countries is more likely to be undereducated, so increasing educational attainment is more urgent.

But the future labour market is an unpredictable thing, especially in the age of artificial intelligence. It is a fair bet that it is the kind of transversal skills – creativity, the ability to work in teams, critical thinking and perhaps, above all, the ability to learn and adapt – that will position the graduates of today for the workplace of tomorrow.

Equitable opportunity

Despite the evident wider benefits of higher education, the value of our system is increasingly judged solely by the perceived individual return on investment – ie, the graduate salary premium. This is an understandable obsession.

The student finance system differs across the United Kingdom, but in England it was conceived as a system in which the costs of supporting higher education were shared by the individual and the state.

It was a co-payment system, in which the state effectively underwrites the individual risk of going to university. It says: we want you to go to university because we need more people to be educated to a higher level. But if it does not work out, if you take a career break to have children, or take a job which pays less but may have high social value, we will pick up a bigger part of the tab.

This was achieved through the combination of (recently much reduced) grants to universities to cover part of the cost, and individual loans, repaid contingent on income and eventually written off if unpaid. After the financial crash in 2008, the balance changed dramatically towards the individual shouldering a higher proportion of the cost.

Today, the United Kingdom has one of the highest proportions of higher education funded by private households in the OECD. So, it is understandable that with the debt burden to the individual, the perceived return on investment is the focus.

Beyond the graduate premium

However, if the whole country benefits in a variety of ways from increased participation, is it time to think differently about using graduate premium as the primary measure of value? We should do a better job of quantifying the benefits of higher employment, better health, satisfaction, public and community service, equity of opportunity and all of the other non-financial benefits of expanded participation.

We should count the national economic benefits of participation and the contribution to productivity, as well as the economic benefits to the individual. Surely, a better balance of understanding the public and private benefits of expanded participation is needed. If we do not grasp this, we risk losing the argument.

We must clearly articulate why investment in higher education should be a priority, including in countries moving towards massification – not just to expand individual opportunity, but for its multiplicity of benefits.

Vivienne Stern MBE is chief executive of Universities UK. E-mail: [email protected]. Ed Castell is head of strategy and insight at Universities UK. E-mail: [email protected]. This article was first published in the current edition of International Higher Education.

This article is a commentary. Commentary articles are the opinion of the author and do not necessarily reflect the views of University World News.