Thursday, April 12, 2007

Chucking More Money News

Oh, there's one other thing I nearly forgot- don't give up Maths or you'll be £350,000 worse off

The Council for Industry and Higher Education wants taxpayers to pay school pupils to pass science and maths A Level. Their Chief Exec repeats a well-known refrain:

"The future lies in knowledge intensive businesses: pharmaceuticals, IT, financial services, manufacturing. They rely on Stem (Science, Technology, Engineering, and Maths) graduates and post-graduates. It is really important that we have a supply chain that is going to produce the numbers."

So they want us to pay pupils £500 a throw.

Now, we can all see the collapse in student numbers for hard subjects like science, and the surge of students into softer options like reflexology (see here for the picture in 2006). But cripes, we taxpayers are already shelling out over £60bn pa on education- surely we shouldn't need to pay bribes as well.

Much cheaper would be to inform pupils from an early age just how much richer they will be if they stick with the hard stuff. Spell out in detail that if they drop Physics for Media Studies, they're walking away from the chance to be hundreds of thousands richer over their lives.

Take this hourly earnings comparison from a recent Price Waterhouse report:

Click image to enlarge

It compares the average hourly earnings of graduates with different degree subjects, expressed as a premium over what people with just 2 A Levels earn. Top of the tree are medicine graduates on an average 44% premium (and this snapshot was taken even before the munificent new doctors contracts handed out by the Department of Health). They're closely followed by lawyers, on 39%.

Those of a free market disposition will be grinding their teeth and recalling how medicine and law are the two last bastions of Spanish practices Maggie never got round to sorting out. But park that, and note that both are hard subjects, along with engineering, chemistry and physics, which come next in the pecking order.

Arts subjects routinely come bottom of the pile, and the softer they are, the lower are the associated earnings. Indeed, PWC report that the earnings premium associated with an arts degree for men is actually negative- ie you'd be better off not taking the degree at all.

The report (along with this companion piece) contains a mass of interesting info, which ought to be invaluable for schoolkids thinking about their future subject choices and where they might lead. Here's another chart, expressing the same earnings data as a capitalised lifetime income benefit (blue bars):

Click image to enlarge

So med graduates on average, can expect a capitalised premium of nearly £350 grand, a quarter of a million better than history grads.

As our beleagured demoralised state schools struggle with the latest crop of government targets and directives, I wonder if any of them tell their pupils any of this. It would be a lot more effective than a £500 bribe.

PS There is another issue highlighted by the PWC work. Despite the age-old wibbling about how "the country" needs more grads to avoid certain destruction at the hands of the Germans/Japanese/Chinese/Insertlatestbogeymanhere, taxpayers have never had a good deal from higher education. Despite taxpayers providing the funding, the lion's share of the benefits has always gone to the grads themselves. Student loans and fees were supposed to redress tht, but according to PWC, under the government's latest variable fee/student loan/bursary funding structure, taxpayers are even worse off. It needs some further digging and another post.

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