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You are here: Member Services > Research And Policy Analysis > ACU Insights > ACU Insights [No. 1: Nov 2011]

ACU Insights [No. 1: Nov 2011]

In this issue ...

Does a university education still pay?

Strategic responses to access 

Making the most of what you've got

Other news

Publications

Recent and upcoming activities at the ACU

 

Does a university education still pay?

Universities will be encouraged by confirmation in a recent report that a university education pays, and in many cases pays well. Commissioned by the UK government ‘Returns to Higher Education Qualifications’ models the life time earning premium associated with a number of HE qualifications. Findings in the report are disaggregated by gender, qualification level and subject and show that the news is better for some, especially those with professionally-oriented qualifications, than others. Consistent findings have also emerged in recent months from reports focussed on New Zealand and Canada.

It is a truism to observe that both students and universities have become increasingly focussed on employment outcomes. In these straitened financial times and with the rising costs of tuition as well as growing competition among a widening pool of graduates, the pressure is on universities to demonstrate that the prospects of employment and earning potential of graduates are significantly enhanced as a result of investing in a university education. As highlighted in the last edition of VC Net the expectation of a return on the financial and intellectual investment of higher education has never been more prevalent.

In the UK report, it is calculated that the average earnings differential over a working life (when the costs associated with the qualification are taken into account), is currently estimated at £108,000 higher for someone with an undergraduate degree against someone with a minimum of two A’ levels. This represents a 14.9% return on the financial investment in the degree (higher for men at 15.6% than for women at 14.8%). However these returns are based on current UK tuition fees rather than the higher rates that will come into force in 2012, meaning future returns will likely drop in the face of higher investment costs. 

There are wide variations in returns across disciplines and gender. For men the subjects with the highest return on their original investment are: mathematical and computer sciences (20.9%), architecture, building and planning (19.7%) and law (19.2%), the lowest returns are associated with creative arts and design and non-European languages (which actually have a negative rate of return for both men and women). For women the best investments appear to be education (21.9%), mathematical and computer sciences (21.4%) and subjects allied to medicine (21.3%).

While the overall earnings of men outweigh those of women, the earnings differential between women with and those without an HE qualification is almost consistently higher than for men. The New Zealand and Canadian findings similarly report an increased premium for women. However, this is largely due to the low overall baseline wages of women compared to men.

The tide might, nevertheless, be changing and neither graduates nor universities can afford to be complacent about the financial and employment benefits of a university education. A recent Economist article speculated about a realignment of the relationship between jobs and education, suggesting that the reliability of the earnings premium obtained with undergraduate and post-graduate education might be challenged by global trends of massification in higher education, off-shoring of high-skilled work and the reconfiguration of educated labour through technology development.  MIT Professor, Thomas Malone, refers to these changes as the ‘division of labour of brain-work’. For the moment, however, the earnings premium of a university education in most subject areas remains intact. Moreover, the premium extends to employability. In the Association of University and Colleges of Canada’s analysis of the trends in higher education they emphasise that graduates experience significantly lower labour disruptions and unemployment rates both in strong and poor economic times. Their analysis found that during the economic slump between 2008 and 2010 there were 433,000 fewer jobs available in Canada for those without a postsecondary degree, while in the same period the number of jobs available for university graduates increased by 300,000. This indicates a disproportionate disadvantage for those without a degree during an economic downturn and perhaps a stronger tendency to require a degree when the job market becomes more competitive. 

Predictably, those with HE qualification have greater earning potential than those without. It is, however, interesting to note the very wide variations across disciplines. With students making more calculated decisions about what to study the survival of those subjects that are not linked to a pre-determined career path will be (and are) at risk. Enhancing the employability outcomes of non-professional/vocational courses will become increasingly important in this context. One approach that is gaining ground is to work with employers to adopt a more ‘competency-based’ model of education whereby there is a shift from the ‘transmission of knowledge’ to developing a broad set of competencies (knowledge, skills and behaviours) that are suited to increasingly global and technologically oriented job markets. Many academics would surely argue that they have always done this by strengthening the intellectual and analytical capacities of students, but the pressure may be on for more explicit evidence of skills acquisition. This might gain particular resonance among academic leaders if the return on an ever more expensive university education becomes less certain.  

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Strategic responses to access

The related issues of university access, equity, and widening participation have been highlighted as a priority in several recent reports and initiatives covering a diverse range of countries and HE systems. Some countries are increasing the number of student places, perhaps to contribute to national development goals or to support a more competitive ‘knowledge-based economy’. Meanwhile, from an institutional perspective, widening participation could be a way for an institution to establish its profile among groups from which it has not previously recruited, or simply to secure continued funding. Either way making sure that many more people have higher education opportunities is prompting some university leaders to define more precisely who their institutions are or should be serving - whether it is students from particular backgrounds, subject areas and employer needs, or academic values and reputation.

At a national level already well-established HE systems are being expanded in order to boost enrolment and also ensure that students do not need to go abroad to study. In India plans have been proposed for some 10,000 PhD graduates from IITs (currently 1000). In Nigeria nine new federal universities have been approved. Elsewhere strategies are being developed which involve the expansion of the post-school sector as a whole, with clearer links and transfer between HE and FE. Singapore has established a ‘Committee to Review University Education Pathways Beyond 2015’ explicitly in order to ‘provide more opportunities and pathways for Singaporeans to obtain a university education’. Similarly Hong Kong has confirmed approval of a plan earlier this month to double the provision of publicly-funded senior year places, and in total enable ‘over one-third of young people in the relevant age cohort [to] have the opportunity to pursue degree-level education’. For states which are establishing new HE sectors – upgrading colleges to universities for example – the ambition is to respond to rising local demand for continued education and careers and give access to graduate-entry jobs.  The development of the Maldives National University, opened earlier this year, is just one example.
 
In Australia post-Bradley policy has been influential with the National Centre for Student Equity in Higher Education (NCSEHE) and reforms to the Youth Allowance, though falls in international student numbers and demand-driven funding are now also having their effect on a changing student profile. The ‘Selection and Participation in Higher Education’ report commissioned earlier this year by the Group of Eight (Go8) recommended using a range of criteria for university admission and being more flexible in applying them. Portfolio applications and school rank (where the context of the student’s own school is taken into consideration) are suggested strategies. Increasing student participation is also a particular priority for regionally strong HEIs, and has already been referred to as one of the shared common goals by one new co-operative HE body - the Regional Universities Network - set up last month. Groups such as the Indigenous Higher Education Advisory Council (IHEAC) have also been effective in allowing university leaders to express concerns over the impact of some national policies on already disadvantaged students.

Equitable university admission is more than simply expanding enrolment or being alert to groups of students which have been not recognised or discriminated against in the past. There are wider claims for social inclusion and mobility, and some widening participation policies reflect this. In the UK, for instance, this summer’s report from the Advocate for Access to Education states the value of partnerships – in practice for universities to ‘collaborate on a regional level on access initiatives’, and to work with other organisations and business in promoting HE. It recommends that more use is made of: contextual data in admissions, further access and foundation courses, and targeted scholarships. As a report to Parliament it also makes recommendations to government departments and regulators but less predictably to schools, recognising that access to HE depends on decisions made well before university-entry. Independently reforms were suggested last month to the university admission timetable, with a UCAS Admissions Process Review arguing that offering places only after school exam results have been confirmed would be ‘fairer to all applicants’.

For universities independence in university admission is one aspect of academic freedom, though when does the right to be academically exclusive become vulnerable to the charge of elitism? The drive for fees and a reputation for being competitive could make university admission even less open, if only in the perception of potential students (as protests to the cost of HE from Latin America to Europe have emphasised). For many university leaders what HE can do in widening participation depends on local context – what the mission, responsibilities, and obligations of a given university are, and what definition of being disadvantaged or excluded is being used. Avoiding discrimination, however this is defined, may not equate with widening access. A system of ‘fair access’ needs to go beyond numbers and admission criteria, acknowledging the circumstances, perspective, and potential of each prospective student.

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Making the most of what you’ve got?

Much discussion of university financing focuses on growing income or cutting costs. But universities may also stand to gain by improving how they spend what they already have. Universities in many countries are experiencing significant cuts in government funding and, as public sector cuts bite deeper, are increasingly expected to justify the money that they do receive. At the same time many are relying more heavily on student fees. In this context higher education is tasked to explain and account for its value ever more –to tax-payers and students as well as to governments – and to demonstrate that it stewards their collective investments well. Emerging from this context a UK task group was recently established to tackle the issue of operational efficiency in a time of greater financial pressure.

In their report the task group argues that greater operational efficiencies could be achieved, by eliminating unnecessary processes, improving procurement, using resources and facilities more efficiently, and reforming institutional systems and processes. In this way an institution might make its operations leaner and less costly as a result. Greater use of shared services and outsourcing to the private sector are suggested– and the advantages offered by cloud computing are explicitly noted. However the task group is keen to emphasise that there is much to be gained by simplifying local operational and administrative processes: conflating the work of one committee into another to reduce academic time lost (and unnecessary paperwork), centralising printing systems to reduce waste, or speeding up library re-shelving to improve circulation.

One innovative example of a university better meeting its needs with its existing resources is the University of Warwick’s ‘Unitemps’ service. This matches the short-term administrative needs of the university’s departments with its ready supply of students needing to earn money around their studies. It has since been extended to local businesses, and has been franchised to other universities.

In addition to local improvements, the task group suggests that universities may also be able to achieve savings on a larger scale. Purchasing consortia can be particularly powerful, where universities are geographically close or have similar infrastructures or common priorities. Scottish universities have, for example, realised huge savings in this way. But as the task group is quick to recognise, in an environment where universities are driven to compete, and where there is a strong culture of autonomy, collaboration can present particular difficulties.

The report appears to assume a clear link between efficiency and effectiveness. Although arguing strongly that a drive to reduce costs and achieve greater efficiencies should not jeopardise quality, the two concepts nevertheless become slightly blurred. This prompts perhaps two important questions: what is efficiency in an academic environment, and is it only defined by cost? And what is the relationship between being more efficient and being more effective? While processes and procedures may be made more efficient, effectiveness is about a whole system – be it a single university or higher education at a national level.

A university which achieves a better efficiency – doing more with less – may not necessarily be more effective. Issues of quality, and of the nature of academic work are essential to this equation. It also depends on where efficiencies are sought – pursuing them in one area may negatively impact another, particularly if administrative efficiency is sought without due regard for academic practice. Conventional wisdom has it that efficiency is about streamlining processes – saving time, and so saving money. But where an institution serves a public good – such as education or health – efficiency and effectiveness are likely to have different, if not incompatible, aims. 

No doubt it is for this reason that the report explicitly concentrates on operation efficiencies, proposing a separate panel to review potential efficiencies in ‘academic practices and processes’. Separating the two may not be quite so straightforward, however. Subjecting academic practices to this approach will undoubtedly be the more difficult task, moving the efficiency project far beyond the technical realms of estate, procurement and finance directorates and into ways of working which are not just well established, but staunchly defended too. The task group recommends the need for a new high-level efficiency panel (achieving greater efficiency first requires the creation of a new organ to do it some may note with a wry smile); this highlights the fact that the efficiencies that the group seeks entails policy level change across the system, as well as change in individual institutions.

Strong leadership and a clear understanding and communication of priorities and the purposes of any change will undoubtedly be critical if any such project is to be successful. Senior management will need to engage their staff, show them why and how they can strengthen what they do, and assure them that ‘efficiencies’ will only be pursued where it enables them to do things better. As the task force emphasises, short-term savings are of little value – the concern should be very much about meeting long-term strategic aims. Certainly the transformation that will be needed will require this kind of vision and timescale.

Sources:

 

Other news

  • India: An All India Survey on Higher Education (Pilot Report) has been issued by the Department of Higher Education as the first stage in collating comparative data on the Indian HE sector to guide future policy.

  • The UK’s White Paper on Higher Education - Students at the Heart of the System - was released in June, prompting further discussion on what the priorities of the university should be, and how the system should be funded.

 

Publications

 

Recent and upcoming activity at the ACU

Earlier this month the ACU launched a new network for doctoral students and early career researchers in African and European countries at the World Innovation Summit for Education (WISE) in Doha. DocLinks, will run over two years with six other partners in Africa and Europe, with the long-term aim of informing policy and strategic development.

The ACU, along with two partners, have also been successful in obtaining funding for a five-year project on Development Research Uptake in Sub-Saharan Africa (DRUSSA). Still in its early stages, the project will seek to help participating universities to build their capacity to communicate, disseminate their research and get it into use.

The ACUs long-standing series of reports on academic salaries in selected Commonwealth countries continues. The latest report is now available to download from the ACU website.

You can also find a number of thought-provoking articles in recent issues of our network publications and the ACU Bulletin on a range of topics including research ethics and the effectiveness of research ethics training; the contribution of data librarians to institutional research infrastructure; the use of social media in HR; and factors influencing international student choices.

 

Forthcoming:
In December the ACU and INASP are jointly convening a conference of Publishers for Development on the theme of Getting research to researchers in developing countries. Early next year the ACU is also staging its first gender focussed conference looking at Women as agents of change through higher education to be held at the University of Kelaniya, Sri Lanka.

The 2012 ACU University Management Benchmarking Programme will cover the themes of: Financial Management; Managing League Tables; and Managing Graduate Outcomes. Further information and details of how to join the Programme can be obtained from the brochure.

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