Educating youngsters to A-level and degree standard boosts the UK’s coffers by tens of thousands of pounds per student, new research shows.
But the economy could be damaged if the UK fails to produce more highly skilled workers, according to a report commissioned by the University and College Union (UCU).
The study shows that it costs the state around £5,000 to put a pupil through a two-year A-level course and almost £19,000 to send the average student to university.
It adds that the UK economy benefits “substantially” from individuals gaining these higher qualifications.
Overall, the Government will get an extra £180,000 back from a graduate over a working lifetime, compared to someone with A-levels.
And the return to the wider economy of a student gaining an A-level is around £47,000, the report says.
The study, conducted by the Institute for Public Policy Research (IPPR), also found that there are still great personal benefits from gaining higher level qualifications.
An individual with a degree can expect to earn £98,000 more over their lifetime compared to someone with two or more A-levels – known as a “graduate premium”.
After tuition fees treble to a maximum of £9,000 this autumn, this premium will fall slightly, although a graduate will still earn between £79,500 and £86,000 more over a working lifetime, depending on the level of fees they paid.
“We have seen that the attainment of higher-level qualifications provides a significant boost to the UK economy, with the Exchequer gaining an additional £180,000 from a graduate over their working lifetime compared to an individual with A-levels,” the study concludes.
“The ‘graduate premium’ has also held strong at £98,000 despite a rising supply of graduates in the workforce.
“Those with further education qualifications will have higher wages and better employment prospects than those with GCSE qualifications as well as being healthier, less likely to be unemployed and/or face imprisonment.”
The study, published as UCU meets for its annual congress in Manchester, says it is vital that the UK ensures it can meet the need for skilled workers in new growth industries. Failure to do so could have serious implications for the UK economy.
“Yet at a time when the proportion of graduates in emerging economies such as Brazil, China and India is increasing rapidly, the outlook for the number of graduates graduating from UK universities is uncertain.”
And in a interview for the report, Nissan vice-president Jerry Hardcastle said: “In India they are churning out hundreds of thousands of graduates and we are churning out a small number and that will restrict our ability to expand.
“We can’t have any shrinking of mechanical engineering graduates – we need more engineering graduates. If they’re not available here, the jobs will move to India, Brazil and China.”
UCU general secretary Sally Hunt said: “This report is a timely reminder why investing in education should be at the centre of the Government’s strategy for growth. Unless we produce more highly skilled workers quickly we will haemorrhage jobs abroad and lose any chance of building a competitive advantage in new low-carbon industries.
“This research shows the huge contribution A-level and degree holders make to our economy and instead of cutting places at college and university, Ministers should be looking to fast-track learners into the industries of the future.”