Increasing HE participation ‘increases wage inequality’

Higher university enrolment worsens the average quality of non-graduates and leads to lower wages, conference told

August 26, 2016
Man shining the shoes of a businessman
Source: Alamy
A smart shine: as more people gain degrees, employers view those without as less able and offer them lower pay

Expansion of higher education participation can make a society more – not less – divided, a conference has heard.

Theodore Koutmeridis, research fellow in economics at the University of Glasgow, analysed US wage data spanning two and a half decades and concluded that increased university enrolment had been associated with greater wage inequality.

He told the annual congress of the European Economic Association in Geneva that this was because a higher participation rate allowed a larger proportion of talented individuals to get a degree and leave the pool of non-graduate workers.

As a result, the average quality of a less-educated worker declines and, in response, employers interpret lack of university education as a clearer indication of low ability and offer these individuals lower wages, Dr Koutmeridis said.

He cited data from the US Current Population Survey, which show that, while degree-educated workers earned roughly one and a half times the salary of school-leavers in 1970, this increased to approximately double by 1996.

This coincided with a significant expansion of higher education participation in the US. Dr Koutmeridis’ evidence for a decline in the quality of non-graduates came from the National Longitudinal Surveys of Youth, a test of cognitive ability, which showed declining scores for young people who did not attend university between 1979 and 1997.

Dr Koutmeridis warned that, as non-graduates became even more marginalised in society, it would become harder for the next generation to gain access to university.

“College expansion is sold by politicians, most of the time, as something that will benefit disadvantaged communities, but in reality that isn’t happening,” Dr Koutmeridis told Times Higher Education. “College expansion mainly benefits those who would have gone to college anyway, or are on the margin, and it leaves a deeper scar on the less privileged.”

Dr Koutmeridis said that he believed that his model could apply to other “Anglo-Saxon” higher education systems, such as in the UK, and argued that it demonstrated the need for a “more inclusive” education system that extended opportunities to all. 

chris.havergal@tesglobal.com

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