Doing the rounds lately is analysis from the Financial Times’ chief data reporter John Burn-Murdoch on the decline of the graduate premium. While the thrust of Burn-Murdoch’s argument is about comparing returns to higher education in the US and the UK, he also observes that within the UK demand for graduate-level skills in the UK is disproportionately centred in London, where the premium remains strong compared to the rest of Britain. In short, the lifetime returns to HE for those located outside London, while still greater than for those without experience of HE, seem to be eroding.
It would be easy to draw the conclusion that the economic conditions outside London point to limited absorption capacity for graduates in the private sector, and even to jump from there to the idea that paying for more people to enter higher education makes for bad economic policy. To his credit Burn-Murdoch does not go there; instead suggesting that neglect of cities and regions by successive Westminster governments has left Britain “burdened by weak demand for valuable skills.”
The analysis has its origin in a wide-ranging paper exploring the interrelated elements of regional inequality published earlier this year by a team at Harvard University, which argues that the data suggests that simply increasing the numbers of graduates outside London without increasing the availability of graduate jobs “may do little to boost regional productivity, and may simply lead to underemployment or further outmigration of university graduates.” So rather than restricting access to HE – and leaving thousands less able to fulfil their potential – the goal must be about tackling the ability of places to make the best use of the graduates their universities produce.
