Degrees adding less and less to lifetime earnings

A new report has found that a degree can add just 22,458 to a graduate's lifetime earnings

12:01 02 June 2005

A new report has found that a degree can add just 22,458 to a graduate's lifetime earnings, meaning the cost of education could see them lose money by going to university.

With a doubling of the number of graduates in the last 15 years, the value-to-earnings rate of a degree is falling, research from the University of Swansea has found.

While the last estimate of the value of a degree to lifetime earnings stood at 400,000 - the new report by Nigel O'Leary and Peter Sloane puts the average return on a degree at just under 150,000 - with a male arts graduate likely to add just 22,458 to their career earnings.

What is more, the authors of the report found that this figure is likely to fall further.

The report comes ahead of next year's introduction of university top up fees by the Government - which used the old 400,000 income boost estimate as part of their argument to set the top-up limit at 3,000 a year.

However, some subjects provide a far greater boost to lifetime earnings than others. While male graduates with arts degrees (including English and theology) add the least to lifetime earnings, maths or computing degrees gave the greatest boost - adding 222,419 for men and 227,939 for women.

The report, The Changing Wage Return to an Undergraduate Education, was compiled using British Labour Survey's findings from 1993 to 2003.

Dr O'Leary explained that while the demand for graduates has increased, it has been outstripped by supply.

"As the number of graduates competing for jobs increases, the earnings premiums they are getting are being bid down," he said.

"Students can still expect substantial returns on their investment. But it certainly does depend on what subjects they do. Those in arts-based disciplines are not getting anywhere near those rates of return."