Starting salaries for graduate-type occupations have increased overall, but the advantage over non-graduate employment has diminished in certain fields, according to new analysis published this week by the Complete University Guide.
The ‘graduate premium’, namely the difference between the mean salary for those starting graduate employment and the mean salary for those starting non-graduate employment, increased overall by 25 per cent between 2005 and 2010, from a differential of £5,485 in 2005 to £6,840 in 2010. This demonstrates a rise in the standard of non-graduate jobs that are obtainable in particular subjects.
This goes in tandem with an 11 per cent rise in starting salaries for graduates, from £19,423 to £21,574 after adjustment for inflation. Indeed, graduates in almost all subjects saw their starting salaries increase over the period 2005-2010, in the case of geology by almost 40 per cent.
There has always been a difference between graduate and non-graduate salaries. Given the rise in university tuition fees and the perception of high graduate unemployment upon graduation, this factor is important for students deciding what to study for a degree, or whether to enrol on a course at all.
However, the advantage over non-graduate employment has reduced in some subjects. For example, over the five-year period, graduate-type starting salaries for graduates in hospitality, leisure, recreation and tourism and in Celtic studies increased by 6-9 per cent after adjusting for inflation.
Yet their advantage in earning power compared with graduates in non-graduate employment fell dramatically over the same period, by 29 per cent and 32 per cent respectively. Conversely, nursing (181 per cent) and geology (155 per cent) showed two of the biggest increases in graduate premium.
Dr Bernard Kingston, principal author of The Complete University Guide, said: “These figures clearly demonstrate the decline in the graduate premium in certain subjects, and must be a concern to students when choosing what to study at university when tuition fees exceed £8,000 a year in England and Wales.
“We believe it is very useful for young people thinking of their choice of subject to see how the earning potential for the occupations for which they may qualify changes over a short time. While financial returns are not the only consideration, they are becoming more important, whether we like it or not. However, with a volatile labour market, it is extremely difficult to predict the future for any particular subject.”
Freddie Nathan is a student at York University. Follow him on Twitter here.