Degrees do not pay off for all

The gap between well-paid and less well-off graduates is growing, according to a report due to be published next week. A separate study shows that less than half of British graduates regard their degrees as being a useful preparation for work.

The findings, to be published next week, could put the brakes on higher education expansion, according to one of the authors.

Geoff Mason, a research fellow at the National Institute of Economic and Social Research, in London, studied graduates working in the service industries - which now account for more than 80 per cent of graduate employment. He found that employers were not making the most of their graduate employees, confining them to jobs in which their skills and knowledge were under-utilised.

Mr Mason said: "While large numbers of new graduates fare well in the labour market, vindicating their decisions to invest time, money and foregone income in university studies, there is a large minority who face a struggle to establish themselves in graduate-level employment. This problem is likely to continue because of the limited scope for further up-grading of hitherto non-graduate jobs.

"The planned increase in higher education participation will be hard to achieve because, for many young people outside the top third of each age cohort in terms of academic ability, it will be a considerable gamble to forgo immediate income and incur high levels of debt in order to acquire higher education qualifications."

Mr Mason's paper, Mixed Fortunes: Graduate Utilisation in Service Industries , was funded by the Leverhulme Foundation.

• A separate international study of graduate employment has found that less than half of British graduates regard their degrees as a useful preparation for work.

A quarter of graduates had not achieved their job expectations within three-and-a-half years, according to the study of British graduates carried out by John Brennan, of the Open University's centre for higher education research and information.

It found that British graduates were more likely to see the benefits as being in their long-term career prospects rather than in finding a satisfactory job after graduation.

"The conclusion seems to be that in some countries, including the UK, higher education is better at getting people jobs than preparing them to do them," said a spokesperson for the Higher Education Funding Council for England, which funded the study.

• Starting salaries for graduates rose last year and there were more job vacancies, a survey showed this week.

New graduates earned an average of £17,786 in the year to May 2001, up 2.5 per cent on 2000, while openings increased by 23 per cent, according to the Graduate Market Trends Salary and Vacancy Survey published by the Higher Education Careers Services Unit.