|Date:||18 August 2016|
|Authors:||Richard Blundell , David A. Green and Wenchao (Michelle) Jin|
The UK higher education sector has expanded remarkably over the past three decades. In 1993, 13% of 25- to 29-year-olds had first degrees or higher degrees. By 2015, this had roughly tripled to 41%. Naturally, one may wonder whether the big expansion has reduced the economic returns to having a first degree. We have all heard stories about graduate unemployment and graduates employed in low-wage jobs. But what do the data show and what can we learn from history?
This briefing note will document the historical trends of rising graduate numbers and their relative wages, and provide economic intuition for what is driving these trends. Understanding the past will be helpful in thinking about the future: if the proportion of graduates continues to increase (which is rather likely given current policies), will it lower graduate earnings?