Without context, looking at graduate earnings by university is pointless

The value added by a university matters more than how much its graduates earn, says Bahram Bekhradnia 

December 23, 2016
Stacked pound coins

The UK government has recently published the results of a pilot study of graduate outcomes and initiated a consultation about whether to publish such information more widely. 

There could be two reasons for gathering and then publishing this information.

First is to provide information to potential students. Second is to provide a justification for allowing some institutions to charge more for tuition than others, and therefore to allow higher loans – or different terms on loans that are taken. Great care is needed with both.

To be useful to a student, he or she needs to know not simply that if they were to go to the University of Oxford they would earn more than if they were to go to Oxford Brookes University, for example. What they would need to know is whether going to Oxford Brookes University enhances their earning potential more or less than going to another university that they may be considering, and to which entry is a realistic prospect.

To be useful, contextual (or rather, benchmarked) information is critical: what a student needs to know is how someone exactly like him or her performs at different universities. 

Similar considerations apply no less – perhaps even more – to the other possible reason for gathering and publishing salary data: to justify allowing universities to charge more, and/or to justify the government making higher loans available to students. 

Students who are less well prepared, and therefore likely to attend the least prestigious universities, require more by way of support and intervention to succeed. This is well-established from research. It is also established that students with the greatest education capital on entry to university are those most likely to obtain the best-paid jobs on leaving.

There is, therefore, an inverse relationship between the earnings of graduates and the expenditure that is required for their education. Unless the aim of the government is to minimise its expenditure rather than to maximise the value it receives for that expenditure, there is no logic in providing additional resources – whether by allowing higher fees or by providing higher loans to students – to those universities whose graduates earn the most simply on the basis of those earnings; or conversely, to reduce the resources of those that perform badly.

One expense, of course, that such universities will tend to have is research. By and large, because of the stratified nature of universities in this country, students from the wealthiest backgrounds tend to be those with the greatest education capital on entry and tend to congregate in the most prestigious universities – which are those that conduct the most research.

It is true that these universities require more income than others – research can be expensive. However, whether that income should be provided through higher student fees, supported by more generous public loans, is debatable.

These universities already receive greater income through the quality-related (QR) element of funding from the Higher Education Funding Council for England and from the Research Councils. Money provided by students, and by the government notionally for education, should not be a differentiator between these and other universities.

If the government wishes to use the earnings of graduates of different universities as an indicator, it should do that by identifying and measuring added value. Without taking inputs and context into account, the knowledge that University of Oxford graduates tend to earn more than graduates from another university is meaningless. 

Such students benefit from greater educational and social capital compared with most other institutions, and this needs to be taken into account when judging which institutions offer best value for money. 

Even having established which universities offer the best value for money or return on investment, using that information to justify greater public investment or higher fees is quite another thing. There is no logical connection between the two. 

But if the government is determined to take graduate earnings and employment into account, it needs at the very least to take value added into account as well in order to optimise its investment – rather than looking crudely at the past earnings of graduates. 

Bahram Bekhradnia is president and former director of the Higher Education Policy Institute.

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