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

You've reached your article limit

Register to continue

Registration is free and only takes a moment. Once registered you can read a total of 6 articles each month, plus:

  • Sign up for the editor's highlights
  • Receive World University Rankings news first
  • Get job alerts, shortlist jobs and save job searches
  • Participate in reader discussions and post comments
Register

Have your say

Log in or register to post comments

Featured Jobs

Assistant Professorship in Behavioural Science LONDON SCHOOL OF ECONOMICS & POLITICAL SCIENCE LSE
Foundation Partnerships Officer LONDON SCHOOL OF ECONOMICS & POLITICAL SCIENCE LSE

Most Commented

James Fryer illustration (8 September 2016)

Some lecturers will rightly encourage forms of student interaction that are impossible for those covering their faces, Eric Heinze argues

University of Oxford students walking on campus

University of Oxford snatches top spot from Caltech in this year’s World University Rankings as Asia’s rise continues

Handwritten essay on table

Universities must pay more attention to the difficulties faced by students, says Daniel Dennehy

Theresa May entering 10 Downing Street, London

The prospect of new grammar schools on the horizon raises big questions for HE, writes Nick Hillman

Nosey man outside window

Head of UK admissions service Mary Curnock Cook addresses concerns that universities might ‘not hear a word’ from applicants