The Department for Education (DfE) has unveiled the highest-earning degrees, with graduates in medicine and economics earning up to £400,000 more over their lifetime than non-graduates. On average, university graduates earn around £100,000 more over their lifetime and substantially more in their 30s than peers without a degree, even after accounting for taxes and student loan repayments.
Disparities in Degree Returns
New research from the Institute for Fiscal Studies (IFS), released by the DfE, shows that the financial return varies significantly by subject. While medicine and economics offer the highest returns, some degrees provide little difference in lifetime earnings, and a few even have a negative financial return on average. Subjects with low or negative returns include creative arts, philosophy, and languages.
However, the IFS report cautioned: “This does not mean estimated returns are negative for all students who take them.”
Government Crackdown on Poor-Quality Degrees
The findings come ahead of the government’s plan to curb the growth of ‘poor-quality degrees’ that offer students little earning potential. The government is also encouraging more people into industries facing potential skills shortages, such as health and social care, industrial strategy, and construction. These sectors will need an additional 1.8 million workers by 2035.
IFS Longitudinal Study
The IFS research tracked a group of English school pupils who took their GCSEs in 2002, observing them until age 37. By that age, women who attended university had 56% higher median earnings than women who did not, while men who studied further had 28% higher median earnings than men who didn’t. Using this data, the IFS estimated lifetime earnings up to age 67. Women with a degree would earn around £290,000 more in their lifetime than those without, while men with a degree would earn around £390,000 more.
However, not everyone benefits. Natan Ornadel, a research economist at the IFS and an author of the report, told the Guardian: “This does not mean that everyone who goes to university will be financially better off as a result: we estimate around a quarter of graduates – and 40% of men with low prior attainment – end up worse off than they otherwise would have been.”
Overall, the research concluded: “We estimate that the average undergraduate degree in England is a financially worthwhile investment for both individuals and the taxpayer.”
