Graduate premium stalling in some countries, OECD data suggest

Figures show a number of nations with high participation rates are not seeing graduates’ earnings rise relative to school-leavers’ wages 

September 12, 2017
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The return that graduates get from higher education may be showing signs of plateauing in some countries, data from the Organisation for Economic Cooperation and Development’s latest Education at a Glance report suggest.

According to the report, the earnings advantage of graduates over those with only school-leaving qualifications dropped by 5 percentage points or more in 11 countries between 2005 and 2015 including in Finland, South Korea, Sweden, Switzerland and the UK.

The data also suggest that many of the countries with the lowest graduate premium were also those with the largest shares of people educated to a higher level.

The figures could stoke the debate about whether participation in higher education is reaching such a level in some developed countries that graduates no longer stand out in the labour market.

Relative earnings of tertiary-educated workers and their share of the population
Source: 
OECD Education at a Glance 2017

Andreas Schleicher, the OECD’s director for education and skills, said that although it was true that degrees “have become the sort of entry ticket to the economy” in many respects, he thought that the data clearly showed that education to degree level still provided a significantly higher income for individuals.

The data also show that relative earnings for graduates increased from 2005 to 2015 by more than 5 percentage points in six countries including Australia, Canada and Spain.

Asked if some politicians could still seize on the data as proof that too many people were going to university, Mr Schleicher said that sometimes such a view came from those talking about education for “other people’s children”.

“If you look at the data, the [best] returns almost exclusively come from higher education. Vocational education is not, on balance, as valued in the labour market,” he said. “Even in countries that do really well on vocational education, such as Germany or Switzerland, you can see big differentials in the wage premium.”

Simon Marginson, director of the Centre for Global Higher Education at the UCL Institute for Education, said that he would caution against an assumption that a high graduate premium “is a good thing” given that it could be due to stagnating wages for unskilled workers and an indication of a more unequal society.

“Graduate premiums remain very high in relative terms in the US and income inequality is at the highest level since the First World War,” he pointed out.

simon.baker@timeshighereducation.com

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