Earnings data support fees hike beyond Russell Group

November 29, 2002

New universities should be allowed to charge top-up fees because their graduates gain almost as much additional earning power as their peers from Russell Group institutions, researchers have concluded.

A study commissioned by the Council for Industry and Higher Education has found that the gap between the earning potential of graduates from top-rated universities and those from former polytechnics closes significantly when other key factors including prior qualifications, type of school attended and parental social class are taken into account.

Raw data gathered from 1985 and 1990 indicate that the value added by gaining a degree at an elite institution in terms of graduates' salaries is up to 9.8 percentage points higher than the value of a degree from a former polytechnic. But when other factors are taken into account to give a more accurate idea of extra earning power acquired by graduates - and therefore a degree's value for money - the difference between Russell Group and new university graduates falls to 4.8 per cent.

A similar exercise comparing earnings for 1995 graduates found the gap narrowed from 12.6 percentage points to 9.9. In this example, there was a difference of only 3 percentage points between Russell Group institutions and other old universities.

A report on the findings - by Gavan Conlon, on secondment to the Department for Education and Skills from the London School of Economics, and Arnaud Chevalier from University College Dublin - concludes that "the argument for charging differential fees is not constrained to a particular group of institutions".

The report says: "A case exists for a wider basis of differential not confined to Russell Group institutions. Many post-1992 institutions and specialist collegesI have centres of excellence that are respected by employers, and deserve to have this signalled through pricing."

* The earnings boost enjoyed by 25-year-old graduates fell between 1983 and 1995, according to a study by the Joseph Rowntree Foundation published this week. Graduates still typically earn 25 per cent more than non-graduates but the job market premium received by women has dropped from 35 per cent to 25 per cent.

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