University degrees failed to appreciate in value for 20 years (1970 – 1990). Instead, degrees were reasons for disqualification in job applications.
Researchers who studied the earnings of graduates from 1970 to 1990 discovered that University graduates in 1970 earned 19% more than their counterparts who didn’t have a degree. Also, the incomes of graduates in 1990 were 11% more than non-graduates.
These analyses by the researchers point to an 8% reduction in graduate earnings within 20 years.
Disqualifying university degrees
Acquiring university degrees is not necessary for financial returns; however, it still remains a financial investment for youth.
As youth increasingly subscribe to university education, the need for student loans rises continually.
Chris McGovern, chairman of the Campaign for Real Education, observed a trend in students’ course of study. Students are being coaxed into enrolling in classes that are not profitable economically.
For instance, Nottingham Trent University offers a university degree related to heavy metal music, a degree that puts off potential employers even in the music industry. Notwithstanding course modification, the content remains heavy metal music, and it’s not viable in the business world.
The heavy metal university degree and a couple of others already disqualify graduates from job openings. It further reduces the earning potential of graduates, better described by the word “graduate premium.”
Graduate premium refers to how much more graduates earn compared to non-graduates.
Essential area of research in higher education
The Higher Education Statistics Agency (HESA) employed data from the Labor Force Survey, the British Cohort Study, or the 1970 cohort and the Next Steps dataset for those born in 1989/90.
To fully ascertain the trend in graduate earnings, further research will look at graduates born after 1990 to determine if the profits of graduates will decline further or increase.
Graduate degrees and corresponding earnings continue to be an essential area of research in higher education.
Dr. Greg Walker, chief executive of universities’ group MillionPlus, explained that the HESA study showed there is a significant financial return to higher education study.
Although there has been a decline in graduate earnings, the Great Recession contributed to this phenomenon. As the economy recovers from the recession, there will be an upswing in the number of graduate-level roles and entrepreneurial opportunities.
University degrees elsewhere
In Africa, up to 20 million well-educated people are projected to join the workforce every year in the period up to 2030. However, as one author suggests, they are the least skilled workforce in the world. Is this a common indicator of the failure of HigherEd to provide graduates with the skills for coping up with their professional roles?
Or someone’s making hay with university degrees but failing to supply the commensurate quality for value-added cost?