Going to university lifts British people’s lifetime earnings by on average at least £100,000, but with men making significantly more than women and the benefits of some science courses being surprisingly low, according to data released on Saturday.
The government also gains from the additional taxes graduates of UK universities pay — £500,000 on average from each of the top 10 per cent of graduate taxpayers alone, the analysis conducted by the Institute for Fiscal Studies (IFS) think-tank on behalf of the Department for Education found.
But, in terms of tax revenue on earnings, it makes a loss on the cost of financing the degrees of 40 per cent of men and half of women.
Mean lifetime earnings for men who attended a British university are £130,000 and for women £100,000 — about a fifth higher than had they not entered higher education, the report said. The top 10 per cent of earners gain £500,000 over their lifetimes.
After offsetting for the cost of student loans, the extra tax revenue generated for the Treasury by those who attended university was £110,000 per student for men and £30,000 for women.
However, the gains are much greater both for people studying economics, medicine and law, and those who attended more selective universities.
Other subjects, including the creative arts, led to negative returns, while the benefits from some science, technology, engineering and maths (Stem) subjects such as biological sciences were also low.
Jack Britton, an associate director at the IFS who helped conduct the analysis, said: “Lots of Stem courses don’t do well. It does not guarantee success. Maybe drawing people into Stem isn’t the solution.”
The figures will provide a boost to the higher education sector at a time of pressure from the government and a number of critics to offer greater value for money.
Michelle Donelan, the universities minister, said in a statement: “This research underlines that our university sector is world leading by setting out the impact higher education can have on someone’s life. When you add the unquantifiable experiences and friendships that come with that, it is no surprise our universities attract students from all over the world.”
The DfE said the analysis was “one tool that will help students of all ages make smart choices about their future – whether that involves university, an apprenticeship or a high-quality technical course”.
Mr Britton said the data only took into account the direct financial gains from study and not the broader benefits of attending university, such as wellness, happiness or wider gains to the economy such as the public service contribution of nurses and teachers.
A government-commissioned review on post-18 education chaired by Philip Augar released last year argued for a shift towards further education funding and greater discretion for the Treasury to pay different tuition levels to universities based on the value of their courses.
Analysts say the analysis is the most comprehensive of its kind, drawing on a variety of statistics, including official longitudinal education outcomes (Leo) data that track students through schooling and university and connects with their tax filings. It showed a significant lift in earnings linked to studies took place when people were aged between 30 and 40 years old.
