Graduate earnings: ‘human capital’ gains subject to scrutiny

‘Manhattan Project’ that some think could pave the way for variable fees proceeds with Nuffield funding

December 19, 2013

Research to measure graduate earnings by university and subject has won funding, prompting claims that it could be used by politicians to raise the fee cap on some courses at elite institutions.

The Nuffield Foundation has awarded a £163,601 grant to fund researchers on the project, titled Estimating the Human Capital of Graduates.

The project, to run until March 2015, will be undertaken by Anna Vignoles, professor of education at the University of Cambridge; Neil Shephard, professor of economics at the University of Oxford; and Lorraine Dearden, director of the education sector at the Institute for Fiscal Studies.

The project, which will use data on earnings from the Student Loans Company and HM Revenue & Customs, has attracted the interest of the coalition government.

Writing in a recent pamphlet for the Social Market Foundation thinktank, David Willetts, the universities and science minister, says that the research “should deliver a significant improvement in the current data on labour market outcomes of similar courses at different institutions”.

Writing in Times Higher Education last summer, Martin McQuillan, dean of arts and social sciences at Kingston University, described the graduate earnings study as “the equivalent of the Manhattan Project for universities in England” – in terms of its having potentially far-reaching consequences.

The project outline on the Nuffield Foundation website states: “If different degrees from different institutions result in very different levels of earnings for students with similar pre-university qualifications and from similar socio-economic backgrounds, then this might affect both student choice and policies designed to increase participation and improve social mobility.

“The project also has the potential to inform our understanding of the value, management and design of the student loan system.”

Zero elite effect

Separate research for the Department for Business, Innovation and Skills recently found that attending Russell Group universities had “no statistically significant effects” on graduate earnings when compared with post-1992 universities once controls for A-level scores and educational background had been introduced.

Professor Vignoles said that Estimating the Human Capital of Graduates would “look at variation in graduate earnings and consider the impact of this variation [on] social mobility. Our question is basically does it matter what…subject group/institution poorer graduates access in terms of their longer-term earnings?”

Asked if the research would look at the Russell Group as a specific category, she replied: “We will be looking at various groupings of institutions, driven by the data on what might make sense to group together – though, not necessarily [at] any self-declared group of institutions.”

Andrew McGettigan, author of The Great University Gamble, said: “Such research could be put to a number of uses, but I believe the main policy context at present would be to lift the maximum tuition fee at particular kinds of course (eg, science, technology, engineering) at elite institutions.

“Their students could be allowed to borrow more to fund tuition fees, because the data show they are likely to repay more.”

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