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You now face a net lifetime financial loss if you do an arts or humanities degree, and quite possibly if you do a science degree too

"The Research Report: The economic benefits of a degree published by Universities UK in February 2007, reports the average lifetime earnings of a graduate as £160,000 more than those of a non-graduate with two A-levels. Within this average there is a range from £340,315 for medical and dental graduates to £51,549 for a humanities degree and £34,949 for an arts degree."

Doing a degree in humanities or arts now involves a net lifetime financial loss, assuming students graduate with fees/costs of £30,000 and interest to be added over decades. But of course, the actual fee+cost will be rather more than that. So why bother?

Of course, if people do science degrees instead, that won't increase the pool of science jobs, so the same number will now be taking those poorer paid non-science grad jobs previously taken by arts and humanities grads (but with their more expensive and largely irrelevant science degrees).

Society needs people to do those graduate jobs. But it seems we now want them to pay for their own university education at a cost greater over their lifetime than they'll gain by doing those grad jobs rather than non-grad jobs.

[[P.S. actually I exaggerate as those who earn less will never pay full amount back and it is written off after 30 years.]]

Comments

Jim Hamlyn said…
Yup , depressing isn’t it? What that quote doesn’t capture though is that male arts graduates already earn less than their non-graduate contemporaries: see article on Lovemoney.com
Fortunately it’s not just about the money though is it? - but your important point still stands.
Emily Ryall said…
But don't forget that the value of a degree here is being measured in purely economic terms. There may be good evidence to suggest a degree in the humanities and arts, though generally leads to a less well paid job than a degree in the sciences, leads to a more satisfying job than not having a degree at all.

I wrote to the minister of HE a few years ago urging him to stop selling University degrees solely on the economic value they may hold to the individual and to start pushing the other values of higher education instead.

You would think this would fit in well with David Cameron's idea of measuring well-being but I've yet to see the Government make or support this link.

Personally, I'm happy to earn the 'average' wage if it means that I can do a job I enjoy. And having a degree in the Arts and Humanities means I'm more likely to get these kinds of jobs. That to me is the most important thing, not the amount of money I can earn because of it.
Stephen Law said…
[[P.S. actually I exaggerate as those who earn less will never pay full amount back and it is written off after 30 years.]]
Hugo said…
"Society needs people to do those graduate jobs."

Oh really?

Possible objections:

No we don't. Plenty of them are not needed.
Plenty of jobs are supposedly "graduate" but don't really need a degree.
Who is "society" is dictate what jobs are "needed"?
Hugo said…
I must admit I find your reaction to the headline fact rather amusing.

Most normal people, if they found out that a particular degree would reduce their lifetime earnings, would say "well then, my reason for looking into doing a degree is to increase my lifetime earnings, and that's a signal to me that I shouldn't do this particular degree", or they would say "okay, this particular degree will reduce my lifetime earnings but I want to do it anyway for my own personal leisure/fulfilment".

Whether the worth of your degree to you is money or enjoyment/interest, the reasoning is the same:
"Is your degree worth £9000/year to you, for whatever reason?
If yes, then you should pay for it.
If no, then go and do something else."


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"The idea that even some science degrees reduce lifetime earnings shows us how bad the situation has become." Indeed, but not in the way that you think.

Too many people are doing degrees. I'll say that again. Too many people are doing degrees.

I understand that you are arguing that these degrees are needed regardless of whether they make economic sense, that the humanities "benefit society" merely by their existence, and should therefore be subsidised by taxes. The claim is that arts degrees don't destroy value because the destroyed value is counterbalanced by this claimed magic benefit.

However, here is a counter-argument:

Degrees that increase lifetime earnings can pay for themselves in two ways: either because the knowledge learnt is actually useful for a job, or because the mere possession of a degree indicates intelligence. A simple model would be that "science" degrees do both, whereas "arts" degrees only do the latter.

Back when degrees had more value, both types of degree were worth doing, and society got the claimed knock-on benefit/externality. But more people doing degrees means more stupid people doing degrees, so arts degrees became no longer an indicator that you were in the intelligence elite and lost their value. People stopped doing them for profit and so the government had to subsidise them in order to keep getting this claimed benefit. However, science degrees still made a profit because even if they didn't indicate you were in the intelligence elite so much, they still gave you some marketable skills, so people kept doing them and society kept getting the knock-on benefit. But then too many people started doing science degrees so science wages fell and the degrees no longer made a profit*.

Even if a subject like papyrology somehow "benefits society" just by virtue of being studied by somebody somewhere, it does not follow that we need an infinite number of papyrologists. We just need a few.

Likewise, the solution with science degrees is for fewer people to do them. Wages will rise and the degrees will become profitable again. If science degrees are unprofitable because there are too many science grads chasing too few jobs, that is evidence that we literally don't need so many.

"We" don't need an infinite number of science degrees. If the number of science degrees falls back to a point where they are economic again, "society" will still have the knock-on benefit of having some scientists around.

The same applies to arts degrees.


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*By profit I mean that the benefits outweigh the costs, and by benefits I mean the sum of all types of benefit.

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P.S. Notice that your "solution" is a positive-feedback mechanism which actually makes the problem worse. Government subsidies make too many people do a degree, which reduces the value of the degree. The degree becomes even less economic, so needs to be subsidised even more! The limiting factor on this positive-feedback mechanism is when the government runs out of other people's money and also has so much debt it can't rack up any more.
Hugo said…
"There may be good evidence to suggest a degree in the humanities and arts, though generally leads to a less well paid job than a degree in the sciences, leads to a more satisfying job than not having a degree at all."

Ha ha! There may be good evidence for whatever assumption I happen to want to make.

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