Whether it is for the love of the subject or simply because it is the norm for one to attend university, one question always lies at the back of our minds: what is the earning potential of holding a degree?
In our highly skilled economy, a university degree is effectively required to get a decent job and definitely offers higher chances of getting employed. Thus, on average the return on investment of a degree is positive. However, there are high disparities among graduates’ salaries which can be explained by three main factors.
First, the type of degree. A report by the Institute for Fiscal Studies (IFS) looking at median annual salary ten years after graduation ranked degrees in Medicine (£55 300), Economics (£42 000), Engineering (£31 200) and Law (£30 000) at the top of the list. By contrast, creative arts and design graduates have the lowest salaries, averaging at £17,900, no greater than non-graduate average earnings.
Second, institutions issuing the degree. The IFS report shows that graduates from Oxbridge and LSE enjoyed the highest salaries. Contrastingly, the returns to lower quality higher education are meagre.
Thirdly, and more worryingly, the graduates’ parents’ financial situation. The IFS said that “graduates from richer family backgrounds earn significantly more after graduation than their poorer counterparts, even after completing the same degrees from the same universities”. As more people get university degrees, the “graduate premium” – the difference between graduate and non-graduate earnings – is dwindling.
No matter the type and the issuer’s reputation, a degree alone will increasingly not be enough to stand out and secure a good job.
Today, employers put more and more attention on employability skills and real-world expertise. This pushes students and new graduates on an intense internship hunt. Having a list of several valuable internships on your CV nearly constitutes a prerequisite for a well-paid job. However, in the internship hunt not everyone is playing by the same rules. Graduates from wealthy families enjoy larger access to informal networks and contacts.
Universities, whose survival relies on students taking up loans, must cope by expanding their careers services.
But even if graduates from poorer families are able to find an internship place it is not certain that they will able to accept it. Most interns are unpaid. Internships that are incompatible with part-time jobs are thus inaccessible to those who do not get parental help to afford the current high living costs.
This means it is difficult for graduates from low income families to enter London where the UK’s leading jobs are, but where the housing costs are the highest.
Access to a university degree is fairer now, but its value as a ticket to a job has become obsolete. Internships are the new tickets, yet their accessibility is undemocratic, creating thereby a barrier to social mobility.