Government report highlights benefits of investing in university

Higher education benefits students and also significantly contributes to long-run productivity and economic growth, according to a government study released today.

As thousands of students receive their A-level results, research conducted by the National Institute of Economic and Social Research (NIESR) for the government details the economic benefits of a more highly-educated workforce.

The University and College Union (UCU) said the research backed the case for greater investment in higher education and better support for the thousands of students hoping to enter university this year.

The research showed that around 20% of UK economic growth (from 1982 to 2005) came from increased graduate skills and there are significant indirect benefits from higher education. Once indirect benefits are taken into account using econometric analysis, a 1% increase in the share of the workforce with a university degree raises long-run productivity by between 0.2% and 0.5%. The research says that we can attribute at least a third of the increase in UK labour productivity between 1994 and2005 to the rising number of people with a university degree.

UCU said the report’s finding* that there was room for further expansion in the number of students studying at university would hopefully arrest the annual belittling of students’ achievements on A-level results day by commentators taking lazy pot shots at so-called Mickey Mouse degrees.

Earlier this week the union released analysis of educational attainment that showed people with higher qualifications were more likely to be in work and more likely to earn a better wage.

UCU president, Simon Renton, said: ‘This report is a timely reminder of the importance of a university education not only to the individual, but also our economy. Higher education is a key driver of growth and we really need to be investing in our universities and our students if we are to our competitor countries.

‘This report makes the case for investment in universities and expansion of high skills. Hopefully it will silence the lazy commentators who use A-level results day to take a lazy pop at so-called Mickey mouse degrees with little understanding of modern higher education.

Commenting on today’s A-level results, Simon Renton said: ‘Students and staff should be congratulated on a very good set of A-level results again this year. Many students will now be left to consider their options if they have exceeded their expectations or not quite made the grade. Clearing will be different this year as we anticipate more universities entering the system.

‘As a result of the government’s constant tinkering with the admissions process in a desire to artificially create a market, some universities will be pulling out all the stops to secure students with the highest grades.

‘Students considering university should be attracted to the courses that best suit their talents, not by financial incentives. We have concerns that some universities may use money earmarked for widening participation to provide bursaries to the best performing, rather than most needy, students.’


* ‘While higher education has expanded significantly between 1982 and 2005 and has continued to expand since 2005, the share of the workforce holding a university degree in the UK remains below that in Finland, the US, Japan and Canada in 2005, suggesting that there may still be room for further expansion.’, p59, ‘The relationship between graduates and economic growth across countries‘, Department for Business, Innovation and Skills, August 2013

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