New research highlights limitations of graduate earnings data

GuildHE says graduate earnings are an unreliable measure of the value of university degrees and should not be depended on for setting tuition fees

The warning comes from the university and college group, GuildHE, which is formally recognised by to represent higher education institutions.

According to new research, commissioned by GuildHE with support from the HEAD Trust, official data about graduate salaries, known as LEO (Longitudinal Employment Outcomes), has serious gaps. These gaps mean assumptions about the impact of a particular university or course on an individual’s earnings can be misleading or significantly exaggerated.

Critical information left out of LEO include personal and family details; information about where in the UK you are working; and details on graduates who did not go to secondary school in England.

LEO only covers graduates’ incomes and employment in the early stages of their careers, and the information on earnings from self-employment is incomplete.

“GuildHE universities firmly believe in the value of higher education and the wide and significant benefits a university education can have for the individual, the economy and society,” said Gordon McKenzie Chief Executive of GuildHE.

GuildHE universities firmly believe in the value of higher education and the wide and significant benefits a university education can have for the individual, the economy and society

He added: “A robust and rounded appreciation of this worth would be very welcome but reducing it to a flawed calculation about graduate earnings would mislead students, parents and employers. This new analysis suggests LEO data should carry a prominent health warning.”

The research, which was carried out by London Economics, suggests directly linking the repayment of student loans to a particular degree oversimplifies the measure of true economic value. For example, the long-term economic contribution of creative arts graduates to business, industry and society is much wider than the of student loans repaid to the Treasury.

The findings also conclude the significant gaps in the LEO data mean how much their graduates earn should not be used to determine different tuition fees between different universities.

The full report, Understanding the limitations of graduate outcome metrics in higher education, Commissioned by GuildHE and the HEAD Trust, and prepared by London Economics, can be found at https://www.guildhe.ac.uk/understanding-the-limitations-of-graduate-outcome-metrics-in-higher-education-18-09-2018-v2-3/