How many people should go to university?

Now that a new government is about to take office (though we don't yet know its exact shape), it seems a good moment to think about this question, since for at least the last decade it has been government policy to aim for 50% of the relevant age group going to university (or other higher education). In Scotland, university participation has exceeded this target for some years, while in England and Wales participation has been in the low 40s percent. How far does this make sense, should there be a target at all, and if so what should it be?

There are two arguments for going to university. The first is the personal one, namely that it is a wonderful, life-changing experience, during which students mature - they learn (we hope!), they change, they discover and develop their abilities and talents. And they do all this in a setting that offers tremendous freedom, tremendous opportunities (and risks), and lots of independence.

The second argument is more practical and mundane, namely the claim that the job market needs more and more graduates, and that an important task for the universities is to help the country satisfy that evolving labour market demand. Part of the argument here is the observation that the structure of the labour market is changing: away from agriculture and industry towards ever more complex services; from low skilled to higher skilled occupations; from manual work towards more intellectual work. The changes are actually quite complex, and are not always as dramatic as the popular media would have us believe - thus there are still lots of manual jobs needing to be done. The evolving situation in the job market is often summed up in the phrase 'the knowledge economy', though our understanding of what this means is itself also constantly evolving!

For individuals, one of the signals that the economy needs more graduates is the job-market premium such jobs offer. One can debate how to measure the rate of return on a university education, and the result depends on the course that is studied and a variety of other factors - but on average, gaining a degree does enhance lifetime earnings quite markedly. On the other hand, this calculation does not imply that all graduates will do well financially. Some take jobs that were not previously thought to require a degree-level qualification - so they get the personal benefit from going to university, but society doesn't get the putative economic benefit.

None of the above implies that the target of 50% participation by young people in higher education is the right one, though it pretty certainly implies that the country needs many more graduates than it was getting 20 or 30 years ago, when participation was still not much above 15% of the relevant age group. So to help us think about more clearly about participation rates, what questions should we be asking? Here are three questions:

1. How many graduates at various levels does the economy actually need, both now, and with some probability in the next 5-10 years? (This is an attempt to pin down some concrete projections about how the labour market is really behaving, rather than continuing with vague statements about 'national needs').

2. What proportion of young people can truly benefit from a university education?

3. What scale of university system can the country afford, and how should it be financed?

The questions are inter-related, of course, and raise a whole lot of other issues to do with 'access to university' (an aspect of question 2), views about the job market, priorities in public spending (linked to question 3), and many other things - to be discussed in future postings. My own provisional view is that to aim for 50% participation is probably too ambitious, both in terms of how many people can benefit (Q2) and in terms of what we can (or are willing to) afford (Q3). Hence if I set a target at all I would set one rather lower than 50% of the age group.

It will be interesting to see what view our new government takes about all this, especially as higher education was hardly mentioned in the election campaign, and only figures quite briefly in the various manifestos (see the first posting in this blog).