IF you are going to university, choosing what to study could be the most important decision of your life – it’s up there with who you marry or when to have kids. Research shows that your life in the labour market is determined more by this decision you make at 18 than even your family wealth.
With the coronavirus crisis, universities are moving lectures online for the first term or even the first year. The days of university being about drinking and self-discovery are over (if they ever existed). The OECD predicts the UK economy will be hit hard by the virus. Students must bear in mind that they’ll be competing for fewer opportunities post-graduation than previous cohorts. Not only that, but under new rules, anyone who undertakes university education in the UK will be permitted to search for jobs for two years after completing their studies. Young Brits won’t just be competing against one another but against international students who often speak multiple languages and who are almost always from families with much more money. Studying something worthwhile which gives you a competitive edge is of paramount importance.
As I pointed out in my last blog, at 18, you’re young and dumb (at least I was) and universities wittingly or unwittingly take advantage of that. If you’re not careful, you could be swindled out of your future.
Since the cost of all degrees is usually the same (£9,250 per annum), their radically different values are disguised. They don’t tell you the profound impact of the subject you study on your future employment and earnings. Five years after graduation, economics graduates earn 40 per cent more than history graduates who in turn earn 15 per cent more than sociology graduates.
What Not to Study
Don’t go to university for the wrong reasons. Don’t go for your friends or to please your parents. Society considers going to university an achievement in itself, with those first in their families to make this commitment being particularly praised. What they fail to tell you is that a big proportion of students (approximately 20 per cent) are paying to be poorer. For men, studying creative arts, English or philosophy results in lower average earnings at age 29 than people with similar background characteristics who didn’t go to university at all. If you study such a subject and you’re a man, you’ll pay a £100,000 penalty over your life in lost earnings.
Avoid arts and humanities courses like the plague. You’ll be lucky if you even get ten contact hours a week which will leave you wondering what exactly you are paying for. Graduates in these disciplines struggled to find employment even during an employment boom. According to government data from 2016/17, those who studied languages, classics or politics were among the least likely to find sustained employment or further educational opportunities within a year. What’s more, it’s highly likely that your salary will stagnate because these subjects have such a low rate of wage growth five and ten years after graduation.
Top universities are promoted as the path to a prosperous future. While it’s true that Russell Group graduates have earnings 10-13 per cent higher on average than graduates of other institutions (rising to about 40 per cent more after five years), the ONS suggest this is because Russell Group students are more likely to have studied medicine, engineering, or physical or environmental sciences – subjects more likely to lead to highly skilled and highly paid jobs.
For some subjects, it makes next to no difference. A politics graduate from Warwick (one of Britain’s best universities) earns just 2.3 per cent more than a politics graduate from Westminster (one of the worst). History at Oxford or classics at Cambridge will get you a starting salary of only £22-24k. This is pitifully poor compared with the median graduate starting salary which has been £30k for six consecutive years. When choosing your course, look for substance and consider what skills you’ll acquire. Don’t be swayed by brand.
Choosing a Degree
Just because we live in a ‘knowledge-based economy’ doesn’t mean filling your head with facts will get you far. The sectors with the highest salaries are predominantly finance, IT, medicine and accounting, all of which require numerical ability. The value of such an aptitude is indicated by the fact that someone with an A* in GCSE maths will earn around £7,000 more than someone with an A seven years after graduation. It shouldn’t therefore be a surprise that seven out of the ten top-paying degrees ten years after graduation are STEM subjects.
With 97.5 per cent of all graduates in further study or sustained employment one year after leaving university, medicine and dentistry are by far the best degrees for finding a job. They’re also the best for making money. At one, three, five and ten years after graduation, they’re the graduates with the highest earnings. Over a lifetime, you’ll have average extra earnings of more than half a million pounds.
Other subjects that can deliver students into the top 20 per cent of the overall earnings distribution include maths, computing, engineering and technology. What’s more, you don’t need amazing grades to get a great career. Computer science at Surrey or engineering at Leicester have starting salaries approaching £30k. The entry requirements are only ABB and BBB respectively.
If you want a subject that stretches you with both equations and essays, economics is the best bet. After medicine, econ grads make the most, averaging £40k five years after graduation. There’s a high chance your salary will rocket with a typical 90 per cent growth rate in pay over ten years. Ordinarily, A-Level maths is a must. However, there are several exceptions, most notably Nottingham, Sussex, Leicester and Loughborough.
International development with economics at Bath is a degree with minimal maths – there’s just one module in quantitative data analysis in your second year. Aside from that it’s largely geographical and political. But employers will view you as an economics grad so expect to start on a saucy £30k.
Not interested? Not numerate? Look at law! Many modules such as human rights, industrial relations and the EU draw on philosophy, history and government but in a much more practical way. Early earnings have a vast variation and are largely contingent on where you studied. Law graduates from LSE, Oxbridge and Edinburgh are among the most handsomely remunerated in the UK, taking home £92-99k after just five to ten years. The fact that four out of the seven highest starting salaries in 2020 were from law firms shows how lucrative law can be.
What’s more, law lends itself to many different careers even if you don’t want to be a solicitor. Since you’ll have studied subjects such as company law, corporate insolvency and intellectual property, you’ll have cultivated a commercial awareness that will make you attractive to employers. Tax consultancy, compliance, as well as other city careers (including finance) are much more closely connected to what you’ve studied than in arts or humanities degrees. The typical career paths pursued by other essay-focused students such as charity or PR are still open to you. The difference is that law won’t close any doors.
In the early 1960s when only 4 per cent of school leavers went to university or even the late 70s when this rose to 14 per cent, a degree in anything from anywhere could get you somewhere. Now that the figure is more than 50 per cent, degrees have depreciated in value. Young people must tread with caution. The holidays you’ll have, the type of car you’ll drive and whether you’ll be able to own your own home will be largely contingent on picking a solid subject.
Life is too fast-paced to spend your most formative years studying something useless and life is too short to enter the working world with £50,000 debt for something you’ll deeply regret.