Higher Education and Human Capital

A few weeks ago I attended a UCU conference in London on the future of UK higher education which had one or two interesting speakers.  The most interesting for me was Andrew McGettigan, an academic who studies the economics and ideology of government education policy in depth.  He explained that because the current system of financing universities is unsustainable (70% of the student loan book will never be repaid) government ideologues are planning to introduce differential support to universities  for educating students in different subjects, which will depend on the expected  “added value” to the student of their degree, as measured  by increase in expected lifetime earnings.  Quite how this would be determined without the projections being hopelessly out of date is not apparent.  The idea would be to encourage the production by universities of “valuable” citizens who will be in a position to repay the cost of their education, since it is expected that universities will naturally try to maximise their income.  So on this model we can expect a big expansion of law, medicine, and accountancy departments and the virtual disappearance of nursing, history, and the arts.  I suspect pure mathematics might not do too well either.
I found a very interesting paper of McGettigan in which he explains the background to this part of his talk in detail.
See also the remarkable table at Fig. 12, frame 19, of the slides from McGettigan’s UCU talk which details the expected lifetime financial benefit of a first degree in various subjects. I reproduce the table here:
Individual net Lifetime benefit of undegraduate degrees

Individual net Lifetime benefit of undegraduate degrees

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