Postgraduate premium shows significant rise

The gap between the salaries of workers with postgraduate degrees and those holding only undergraduate degrees has grown significantly, a study has shown.

November 3, 2011

In a discussion paper for the London School of Economics' Centre for Economic Performance, Stephen Machin, the centre's research director, and Joanne Lindley, senior lecturer in economics at the University of Surrey, report that the differential between the average wage earned by UK workers with a postgraduate degree and those with an undergraduate degree rose from 6 per cent in 1996 to 13 per cent in 2009.

In the US, the differential rose from 14 per cent in 1980 to just over 30 per cent in 2009. In both countries, the rise was larger for those with doctorates than for those with master's degrees.

The paper, Rising Wage Inequality and Postgraduate Education, says the differential grew despite the fact that in both countries, the proportion of the workforce with postgraduate degrees increased more quickly than the proportion with undergraduate degrees alone.

The authors suggest that the rising postgraduate premium is related to the expansion of technology in the modern workplace.

They note that the increasingly sophisticated use of computers since the 1980s correlates with the rise in the premium for those with higher degrees.

Computer matching

This is because postgraduates' skill sets make them "more complementary to computers", the authors claim, adding that significantly more postgraduate respondents to the UK 2006 Skills Survey reported using a computer to "perform complex tasks" in their jobs.

Dr Lindley told Times Higher Education that these tasks might include computer programming, as well as design and statistical analysis.

She agreed that some postgraduates were no more technically literate than the general population, but she said they were a declining proportion. "For example, a significant part of the increase in postgraduates is in master's courses in areas such as business, finance and technology-related subjects."

Meanwhile, the Higher Education Funding Council for England has revealed that the number of people beginning a UK PhD programme rose by 81 per cent between 1996-97 and 2009-10.

The data on PhD trends and profiles also show that the biggest influx of starters from 2007-08 were on part-time doctoral programmes.

On full-time courses, numbers of non-UK European Union and international students climbed by 122 and 115 per cent respectively between 1996-97 and 2009-10. This compares with growth of 57 per cent among UK students. That last group, however, grew most rapidly from 2007-08, expanding by 21 per cent compared with 3 per cent among international students.

By far the biggest increase in full-time numbers came in creative arts and design, up 338 per cent. There were also large rises in computer science, medicine and business, but veterinary science grew by just 1 per cent.

Register to continue

Why register?

  • Registration is free and only takes a moment
  • Once registered, you can read 3 articles a month
  • Sign up for our newsletter
Please Login or Register to read this article.


Featured jobs