Friday, April 13, 2007

More On Value Of Uni Degrees

Drinking Studies at the University of Watford Gap

Following yesterday's post about the proposal to bribe students into sticking with "hard" subjects like Maths and Physics, the ever dependable Jeff Randall has written on a similar theme, highlighting the "employability gap" between top unis and the rest:

"Although obtaining a place at university has never been easier, most employers wised up long ago to the dilution of degree quality. As a result, winning a place at an institution that is respected by recruiters - and will lead to premium-rate employment - is becoming increasingly difficult.

As in most markets where there is chronic over-supply, buyers dictate the terms of trade. The Student Book 2007 warns: "Despite claims to the contrary, employers seldom regard universities or their graduates as equal; they use their own employment criteria. Many are fairly conservative and still prefer graduates from Russell Group universities." This refers to the group of 20 top research-intensive universities, so called because their first meeting was in London's Russell Square."

A few years ago, LSE researchers reckoned a degree from a Russell university was worth up to £22,000 more than a similar degree from elsewhere. The gap's probably even bigger now. Randall goes on:

"For many blue-chip companies, the list of universities from which they normally select is shorter still. The Sutton Trust, a respected educational charity, identifies the elite as numbering only 13: Birmingham, Bristol, Cambridge, Durham, Edinburgh, Imperial, London School of Economics, Nottingham, Oxford, St Andrews, University College London, Warwick and York. These institutions have the most exacting entry requirements, yet a majority of their courses are hugely over-subscribed."

As he says, the tragedy here is that Labour's headlong- and expensive- dash to reach its arbitrary 50% target for university education is landing a lot of Britain's kids with degrees that are worth very little in financial terms. But they still incur £15-30 grand's worth of debt.

I'm sure you'll be aware that there's very little quantified evidence to show that university degrees are actually much more than a signalling device- ie a piece of paper that has no value other than signalling to employers which people are likely to be a "good employees". One implication is that, while degrees make perfect sense from an individual's perspective, their overall value to society is highly questionable, and a lot less than most of the economic return studies suggest. The economic value ascribed to the degree is actually just the value produced by good people, who'd produce most of it whether or not they had a degree.

But the ballooning number of marginal/useless degrees may have taken us beyond that. If some of the new degrees are discounted by employers altogether, they may actually operate as negative signalling devices. They may say "this guy clearly isn't bright enough to do a proper subject at a real uni, but it's even worse than that- he's so workshy and unfocused he chose to spend three years birding and boozing at the University of Neverpay rather than face up to the real world."

Or is that just me?

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