Subject, not cost of fees, determines salary premium, study finds

The financial return on university study is determined more by the subject chosen than by tuition fee levels – and is not as high in science subjects as in others, according to a study.

December 4, 2010

Research by Ian Walker, professor of economics at Lancaster University Management School, suggests that although wage growth is stronger for graduates than for non-graduates, there are significant differences related to subject studied, result obtained and the sex of the degree holder.

For example, male graduates who achieve at least a 2:1 degree in law, economics or management can expect a return on their investment of almost 30 per cent, but a man with a science degree of a similar level may see only a 7 per cent return.

Women, meanwhile, do well in all subjects, with an “internal rate of return (IRR)” close to 17 per cent, according Professor Walker’s report in Research in Public Policy.

The IRR is calculated by projecting lifetime earnings excluding tuition fees, tax and other costs while taking on board loans and grants that are on offer, and then estimating the rate of return that would yield an equivalent sum.

“The overwhelming conclusion is that higher fees would not have made much difference – the dominant determinant of the returns to your investment is the subject you study and how hard you study it,” Professor Walker said.

According to the research, the returns gap between graduates and non-graduates is large for most men, except for those who study arts, humanities and social sciences other than economics.

simon.baker@tsleducation.com

Already registered?

Sign in now if you are already registered or a current subscriber. Or subscribe for unrestricted access to our digital editions and iPad and iPhone app.

Have your say

Log in or register to post comments

Featured Jobs

Board Member BOURNEMOUTH UNIVERSITY (MAIN OFFICE)

Most Commented

Elderly woman looking up at sky

A recent paper claims that the quality of researchers declines with age. Five senior scientists consider the data and how they’ve contributed through the years

Otto illustration (5 May 2016)

Craig Brandist on the proletarianisation of a profession and how it leads to behaviours that could hobble higher education

Eleanor Shakespeare illustration 19 May 2016

Tim Blackman’s vision of higher education for the 21st century is one in which students of varying abilities learn successfully together

James Minchall illustration (12 May 2016)

An online experiment proves that part of the bill for complying with the Freedom of Information Act is self-inflicted, says Louis Goddard

smiley, laugh, happy, funny, silly, face, faces

Scholars should cheer up and learn to take the rough with the smooth, says John Tregoning