Economist urges variable fees to cut oversupply of humanities graduates. Louise Radnofsky reports
Universities should set student tuition fees according to how much a degree subject is valued by employers, a leading education economist has argued.
There will soon be too many arts and humanities graduates, and the value of their degrees is likely to fall below the cost of the tuition fees paid to obtain them, Anna Vignoles of the Institute of Education said.
Already recent graduates in some of these subjects earn no more than school leavers with A levels, and for young graduates the rate of return on a degree has fallen dramatically in the past eight years, she pointed out.
If fees are not varied by subject, students could be put off doing subjects with no immediate employment benefit altogether, especially if the cap on top up fees is lifted, as expected, after 2009, Dr Vignoles said.
"Some small subjects with very little labour-market value would be priced out," she said, ahead of a presentation to this week's annual conference of the British Educational Research Association.
The sector will have to consider the cost of offering degrees in different subjects and think about what it wants to protect, she said.
Accountancy graduates earned up to 40 per cent more than peers who studied arts subjects, according to a study Dr Vignoles will cite. Women who studied engineering, maths and computing also fared well, while men enjoyed significantly higher returns on degrees in medicine and law.
Holders of numerical or scientific degrees were likely to remain in high demand and earn a big premium in the labour market, Dr Vignoles said. Low earnings of some recent graduates may mean it is taking longer for them to break into the labour market, but the data may also show that the market is becoming saturated.
"If graduates continue to choose degree subjects that are less valued by employers, and we continue expansion in areas where graduates are choosing skills that employers value less, we could have a problem."
Bahram Bekhradnia, director of the Higher Education Policy Institute, agreed with Dr Vignoles that there should be "be more of a market in tuition fees."
However, he continued: "I wouldn't agree with the notion that less education is better than more education, even if it does lead to lesser riches in the job market."
Bill Rammell, the Minister for Higher Education, said British graduates enjoyed high returns despite the expansion of higher education.
"Independent analysis suggests that the average premium over a working life remains comfortably over £100,000 (after tax) in today's valuation."