University graduates on average earn around £100,000 more over their lifetime and earn ‘substantially more’ in their 30s than their peers without a degree, even after taking the taxes and student loan repayment costs into account. But students could quadruple this figure based on the specific field they choose to study in.
The Department for Education revealed the highest-earning degrees, with new research from the IFS. However, it also found that some degrees offer little difference in lifetime earnings, while a few even had a negative financial return on average. Graduates in medicine and economics had the highest earning potential, offering up to £400,000 more over their lifetime than non-graduates.
Several subjects had low or even negative returns on average, including:
- Creative arts
- Philosophy
- Languages
However, the IFS report highlighted: “This does not mean estimated returns are negative for all students who take them.”
This research comes ahead of the government’s plan to crackdown on the growth of ‘poor-quality degrees’. Which offers students little opportunity and earning potential in their future careers.
The government is also trying to encourage more people into industries that are expected to be facing a potential skills shortage in the near future. One of which is the field of health and social care, as well as industrial strategy and construction. Overall, these three industries will need an additional 1.8 million workers by 2035.
The IFS research followed a group of English school pupils who took their GSCEs in 2002 and observed them until the age of 37. By this 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 of the group up until age 67. In total, women who attended university would earn around £290,000 more in their lifetime than women who didn’t study further.
Men who completed a degree would earn around £390,000 more in their lifetime than men that didn’t continue studying. However, not everyone who goes to university is guaranteed these results.
“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,” said Natan Ornadel, a research economist at the IFS and an author of the report, according to the Guardian.
But overall, the research concluded: “We estimate that the average undergraduate degree in England is a financially worthwhile investment for both individuals and the taxpayer.”