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Last Updated: Tuesday, 14 September, 2004, 09:02 GMT 10:02 UK
Degrees retain earning power
University library
Graduates in the UK command higher salaries
A sharp increase in the number of people getting degrees has not reduced the extra earning power of graduates.

The annual education report from the Organisation for Economic Co-operation and Development shows graduates are still maintaining a pay gap.

Even though in some countries, graduate numbers have risen by 50%, this has not eroded the financial benefits of having a degree.

In the UK, average graduate earnings are 59% above those of non-graduates.

The OECD's Andreas Schleicher said there was an expectation that the rapid increase in graduates in industrialised countries would lead to a lessening in the financial benefits of having a degree.

University expansion

But this had not proved to be the case, he said. And the pattern from OECD countries showed that the labour markets were still ready to pay extra for people with degrees.

International comparisons on various indicators, including a few non-OECD countries.

This gap was particularly high in the UK - and Mr Schleicher said there was a "strong penalty" paid in lower earnings for those who did not get degrees.

The annual international snapshot of educational achievement shows that in leading industrialised countries graduate numbers are continuing to increase.

The United Kingdom is among a group of countries, including Australia, Finland, Ireland and Spain, which have increased graduate numbers by more than 20% between 1995 and 2002.

But there were countries where student numbers had risen by 50% or above, including the Czech Republic, Poland, Hungary, Greece and Korea.

The OECD figures, for 2002, show that 47% of young people in the UK are going into higher education - as the government pursues a target of 50% by the end of the decade.

But there are countries where more than 70% of young people are going to university, including Finland, Poland, Australia, Iceland and Sweden.

Upper limit

Mr Schleicher says that he does not foresee an upper limit on student numbers - they could rise well beyond the 70% level.

But the report also shows the proportion of students who stay on to complete their degree courses. The UK has previously been very successful in this - although the most recent figures show it has slipped to the fourth highest completion rate.

The report shows that even though funding for higher education in the UK is above the average for the European Union, the amount per student has fallen.

This is because the increase in funding that there has been has not kept pace with the increase in student numbers.

The annual survey gathers data on national education systems - and this year, the OECD highlighted the success of South Korea, which was described as an example of how an education system could be improved.

In the 1960s, the country was among the lowest achievers in education. This report now shows that South Korea is among the highest performers at school and degree level.

Funding levels

South Korea has the highest level of investment in education out of all the OECD countries - although this includes a large contribution from private funding, especially at university level.

The funding for school age and pre-school age children in the UK was a mixed picture.

For pre-school children, the UK spends well above the average level, and is ranked third in the survey. At primary and secondary level, per pupil funding is below average.

The UK government points out that it is increasing spending.

But in any case Mr Schleicher qualified the figures by saying that there was no direct link between funding levels and achievement - and lower expenditure could reflect a more efficient system.

The OECD survey also showed that pupils in the UK were likely to study much longer hours than in many other countries.

The lowest number of lesson hours was in Finland - one of the most consistently successful education systems.

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