Graduate premium down by 60% in five years, says Universities UK

07.05.07

Graduate premium down by 60% in five years, says Universities UK

Why is the graduate premium such a statistical hot potato?

Compare and contrast the following.

‘Our graduate premium of around £400,000 on lifetime earnings is one of the highest’
Professor Roderick Floud, President, Universities UK, speaking to Annual Conference on 11th September 2002

‘There are significant economic benefits... to obtaining a degree and these amount to £160,000 over a working lifetime’
Professor Drummond Bone, President, Universities UK, writing in the UUK research report ‘The Economic Benefits of a Degree’ (7th February 2007)

Flawed statistics?
The graduate premium is a giant statistical hot potato, because on it rests much of the raison d’être for higher education from many UK students’ point of view.

Of course, the big and embarrassing variation in the two figures comes from the fact that they were complied very differently, with the larger figure now widely considered to be discredited.

Support for HE
Apart from the way that the first, much higher figure was used by the government to shore up support for the Higher Education Bill – even when the second figure was readily available – there is something else that is remarkable about the latter figure. In the Universities UK report, the £160,000 is sourced to a Hansard written answer for 8th December 2003 from the Minister for Higher Education.

However, both the Minister and the underlying research gave the figure in its net form (£120,000), PricewaterhouseCoopers, who authored the 2007 UUK report, has converted it to gross, specifically for inclusion in ‘The Economic Benefits of a Degree’.

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