This blog post on the new research by the Institute for Fiscal Studies on graduate earnings first appeared on 13th April 2016 on HE from Research Professional.
Waiting for the results of the most detailed ever study into the earnings of UK graduates, which has been published today by the Institute for Fiscal Studies (IFS), has been reminiscent of the First World War. When I worked in Government, as the Special Adviser to the Universities and Science Minister, we had hoped the results would be available by Christmas 2012, soon after the introduction of £9,000 fees. But they have taken almost four more years to see the light of day.
There are good reasons for this. The research syncs student loan and tax record data for 260,000 people, which is a big job. It took ages to get the earnings data from Her Majesty’s Revenue and Customs in the first place and then to mould it to the form the researchers wanted afterwards. Two lead researchers, Neil Shephard and Anna Vignoles changed jobs in the middle of the work, in one case moving abroad. Moreover, the need to secure funding, opposition from academics nervous about the potential results and the desire of the researchers to consult people on the journey to publication all had an impact on the speed of the research.
Now that the results are out, they are both exciting and underwhelming. They are exciting because of the potential consequences for public policy of this sort of work – which are greater than the somewhat mealy-mouthed conclusion to the published paper admits. Knowing the financial return of individual courses does not only allow the Treasury to work out which students are unlikely to pay back much of their student loans, and thus to calculate the default rate (the so-called RAB charge) for each course. It also enables us all to find hidden gems, such as courses in less prestigious universities that deliver above-average outcomes in terms of employment and salary. It could even influence the Government’s long-promised sale of student loans, as it will be easier to split the outstanding student loan book according to the likely repayment rate of each tranche.
Of course no one knows for certain in which directions the new era of big data, of which this research is part, will take public policy. But, a few years ago, David Willetts gave a clue in an overlooked aside in an article justifying his higher education reforms. He wrote:
‘One reason why we were not able to accept Browne’s ingenious idea of a levy on higher fees is that it was indiscriminate and did not reflect the actual Exchequer risk from lending to students at specific universities.’
So it is possible that one other consequence of the new research is a debate about whether England should have different fee caps for different subjects and at different institutions instead of an across-the-board £9,000 fee cap.
Yet the new research is also underwhelming because it records a bunch of things that are already widely known. Graduates do better than non-graduates. Male graduates earn more than female graduates. Students from wealthy backgrounds go on to earn more than ones from poorer backgrounds. Medics do better than students in Creative Arts. But it does not include enough detail to make much difference to the choices university applicants make. (Except, perhaps, to show that you should go to the LSE if you want to be rich – the IFS press release notes, ‘[The] LSE was the only institution with more than 10% of its female graduates earning in excess of £100,000 a year ten years on.’) In many respects, the new research simply echoes dinner-party conversations about what middle-class sons and daughters should do.
I nonetheless wholeheartedly welcome the publication of the research, unlike some others who work in higher education, because it provides additional support for things many people suspected were true and begins to shine a torch on where policy might go next. Because data and evidence are the raw materials of academia, it is unconvincing when people working in universities argue that new evidence of this sort is ‘dangerous’.
It is true that some uncomfortable conclusions could be drawn by people who obsess about the private financial returns of higher education over other effects, such as the benefits to society. For example, taken at face value, this sort of research suggests lower-paid graduate professions, such as nursing, have little value. But that is not a difficult claim to disprove and, if there is a single group of people in society who should be able to contextualise unsettling findings, it is those who work with new knowledge inside universities day in and day out. It is not even hard to defend Creative Arts, which is the discipline that comes out worst from the research. As someone wise once said, it is science that lets people live longer but culture that means we want to.
Other countries are similarly exploring the uses of such data, and the UK will be left behind if we do not do the same. In the United States, for example, eligibility for student aid is being linked to whether a course provides ‘gainful employment’ – defined as by whether student loan repayments exceed 20% of someone’s discretionary income or 8% of their total earnings. Indeed, this is turning out to be Obama’s key way of tackling the scandal of for-profit colleges providing poor education.
So the really important thing about the new research is that the genie is out of the bottle, as Alison Goddard put it in a recent 8am HE Playbook (£). Today’s report is likely to be the first of many, not least because the law has recently changed to make it much easier for researchers to link official datasets.
Moreover, just last month, in the small print of the Budget, the Government committed itself to bringing ‘together information about the wages of graduates of different courses and the financial support available across further and higher education to ensure that people can make informed decisions about the right courses for them.’ That means we can be certain that if others don’t, Ministers will.