30 SECOND GUIDE: University

By DAILY MAIL REPORTERS

Updated: 05:38 EST, 16 August 2013

The Daily Mail City team explains the benefits of a university education for the economy

Benefits of a university education?

Graduates may be seen by some as a lowly life form but they are valued by potential employers. The ‘graduate premium’ is simply the difference between the starting salaries for a graduates and those who did not go to university.

Is there a big gulf?

Graduates are generally always paid more than non-graduates for the same roles. The graduate premium increased by 25pc between 2005 and 2010, to £6,840, according to The Complete University Guide. But it has decreased for some subjects – including vocational studies like hospitality, leisure and tourism.

Higher earners: University graduates earn more than their peers because they are deemed to be more productive according to the NIESR

Isn’t uni a waste of money?

The rise in university tuition fees and graduate unemployment certainly makes this difference an increasingly key factor in deciding to study for a degree.

Why are graduates paid more?

They are more productive, says  the National Institute of Economic and Social Research. Its research suggests there are long-running economic benefits of more people going to university. Between 1994 and 2005 the share of the workforce with a degree increased by 37 per cent. Over this period average labour activity increased by 34 per cent.

Coincidence?

Not according to NIESR. This means that at least one third of the increase in labour productivity between 1994 and 2005 can be attributed to the accumulation of graduate skills in the labour force.