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.

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

Already registered?

Sign in now if you are already registered or a current subscriber. Or subscribe for unrestricted access to our digital editions and iPad and iPhone app.

Register to continue  

You've enjoyed reading five THE articles this month. Register now to get five more, or subscribe for unrestricted access.

Most Commented

  • Elly Walton illustration (16 July 2015)

Whether in jest or not, sexist language shows an insensitivity to gender issues at odds with academic values, argues Dorothy Bishop

  • Tony Little, Eton College headmaster, 2007

Tony Little points to ‘increasing gap’ between teaching standards at sixth form and university

  • Tourists in rubber rings and flippers ready for snorkeling class

Dress to impress if you want students in your corner, claims US study

  • gold on scales

£246 million is big money but it is probably much less than the hit the research budget would take if the REF did not exist, says Paul Jump