Friday, 21 September 2012

UK graduate premium has increased

A very interesting piece of data from the new Education at a Glance concerns the UK's graduate premium - the relative earnings boost experienced by holders of a degree.

It's gone up, and is now the highest for over a decade.

Here is the graph

All data from 2000 comes from the OECD's Education At A Glance 2012, and the 1997-1999 data comes from a bit of statistical archaeology from the 2005 edition.

So, what we have here is the relative earnings, in the UK, of degree holders aged 25-64 compared to those in the jobs market with 'upper secondary and post-secondary non-tertiary education' - or, in other words, A-level or equivalent.

So, since 1997, the premium pootled along within 3 percentage points of graduates earning about 60% more than A-level holders - in other words, probably within statistical bounds of being more-or-less static. It then dropped as the recession began, as the graduate-heavy finance and engineering sectors took a pounding but has increased sharply until 2010, where it stood at the highest for over a decade.

It's probable that what this represents, at least in part, is the ever-increasing disadvantage to being less educated in a tricky jobs market - it doesn't mean degree holders have had enjoyed marvellous pay rises. And we must be careful to draw firm conclusions from a single data source, no matter how thorough, reputable and impartial the OECD is.

But it does demonstrate that a UK degree is valuable, and that anyone wishing to suggest that the value of a degree is reducing needs very convincing evidence to demonstrate it.

Monday, 17 September 2012

Education At A Glance

Whilst I was out of action, the annual OECD publication, 'Education At A Glance' came out, with international comparisons of all sorts of data in it as per usual.

There's all sorts of fascinating stuff this time, including an attempt to examine the social benefits of education (degree holders more likely to vote, for example).

The data also seem to show an increase in the wage premium for degree holders in the UK since the recession began (see Table 8.2A). This is a predictable result of job losses for those with lower qualifications, leading to a degree having more relative value to the holders.

But one thing that struck me was the data on unemployment rates by qualification levels, which gives this graph.


This is a good demonstration of how valuable a degree has been in the recession - and how hard it's been on people with lower qualifications.

Charlie Is No Longer Broken

File under 'tedious personal detail', but I'm now back (actually, I was back last week but spent it travelling up and down the country talking to people - hello to Leeds Trinity and Queen's College London, where I was giving talks on the current and future state of the graduate labour market, and what you might need to think about now, if you're going to be applying for jobs after university, respectively.

There'll be some changes around here soon, but we'll get to that in good time. At present, we're looking at the current state of the jobs market for graduates. It looks as if things might have got a little more difficult (not unreasonably so, but a bit tougher) in the early part of 2012, and we are waiting to hear how employers saw the summer.

The Bank of England Agents Summaries current suggest that uncertainty is leading employers to defer changes in employment (for good or ill) for the time being, but that suppliers to the public sector (unsurprisingly) might be reducing employment - this may affect graduates. On the bright side there may be job creation in some areas of the finance industry (compliance, risk management), and I am hearing that recruitment in other parts of the finance industry may have held up well so far this year.

So, at the moment, it looks a little as if 2012 might be more of the same for graduates - not easy, but not impossible to find work. We'll keep an eye on things.