Category Archives: Economics

Higher education in 2013: the year of marketisation – but to what extent?

By Gill Wyness and Richard Murphy

This year has been a significant one for UK higher education, with the government rapidly moving the system away from a state-controlled sector towards a more marketised structure – to the applause of some and the growing malaise of others.

It culminated in the surprise removal of the long-standing student number controls, freeing up universities to recruit as many students as they wish. This comes 50 years after the anniversary of Lord Robbins’ seminal report on the expansion of higher education, with its vision that “courses of higher education should be available for all those who are qualified by ability and attainment to pursue them and who wish to do so.”

If 2013 has been the year of marketisation, how far towards a fully marketised system has UK higher education actually come? Let’s consider the statistics:

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The boom in postgraduate education and its impact on wage inequality

by Joanne Lindley, Kings College London and Stephen Machin, London School of Economics

Mass participation in higher education has altered the typical path followed by university graduates. The norm used to be that after obtaining an undergraduate degree, people would finish their studies and enter the labour market. These days, many more students stay on to invest in postgraduate education. Indeed, by 2009 just over 10% of the workforce in Britain and the United States – and more than a third of all graduates – had a postgraduate qualification.

It is now widely understood that despite rapidly growing numbers of university-educated workers, increased relative demand for their skills has been a key driver of overall wage inequality.

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University Exam Results Matter

By Georg Graetz, London School of Economics

How much does the class of degree affect earnings in the first job?  Using exam results and class of degree from five cohorts of London School of Economics (LSE) undergraduates in combination with a survey of their income in year after they graduated we find there are significant gains from just making the grade.


  • The average wage pay-off to a First compared with a 2:1 is pretty small – around a 3% higher expected wage.
  • There is a bigger difference between a 2:1 and 2:2 – a 2:1 is worth about 7% higher wages.
  • These results are driven by males: men get about 6% in higher wages from a First whereas there are no significant gains for women.
  • The cash premium for getting a First for a male is about £1,780 whilst women basically get nothing

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Do student satisfaction ratings affect university choices? New evidence about the National Student Survey

By Dr Steve Gibbons, London School of Economics

The season is here when next year’s school leavers start filling in their UCAS forms and applying to university. Yet, as any of us who know someone in this position will agree, picking a university is not always easy. For most subject areas, there are a large number of universities to choose from, and making a choice can involve a lot of research.

To help students with these difficult choices, The National Student Survey (NSS) was introduced in the mid-2000s to provide information about students’ satisfaction with their degree course. This survey has captured the attention of university lecturers and administrators, underpinned by concerns about the impact of scores on future recruitment. NSS scores are also one of several quality indicators used in the “league tables” published in newspapers and guidebooks. But do students really take any notice of satisfaction scores in making their university choices, or are other factors more important?
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Competition for foreign students ramps up in London

Higher education is one of London’s many draws, with 40 higher education institutions including five of the 24 prestigious Russell Group universities, and London universities performing particularly well in the recent Times Higher Education world rankings. However, there are several more universities in London than these HESA statistics show. This is due to the growing trend for universities outside the capital to open up London campuses.
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