Page last updated at 09:04 GMT, Tuesday, 9 September 2008 10:04 UK

Student growth risks widening gap

Higher education rates

The number of students entering university has increased by 50% in a decade across industrialised countries, says a major annual survey.

But for the UK, the growing number of graduates risks a widening social gap warns the Organisation for Economic Co-operation and Development (OECD).

The report shows that on average 56% of school leavers in advanced economies now enter university courses.

But there are fears that in the UK that low achievers are falling behind.

Each year the OECD publishes an Education at a Glance guide to international trends in school and university in more than 30 countries, showing how industrialised economies compare in terms of spending and results in education.

'Dramatic increase'

This year, researchers have highlighted the expansion in higher education, which between 1995 and 2006 has seen an extra eight million students entering university in these OECD member countries.

Student growth risks widening gap

But OECD analyst, Andreas Schleicher, says that while graduates in the UK are benefiting from this expansion, there are worries about the scale of the penalties facing those youngsters who drop out of education.

"The UK has seen a rapid growth in participation in higher education, like most other countries, with a dramatic increase in demand for better qualifications - driven by higher earnings, better employment prospects and a growth in skilled jobs," says Mr Schleicher.

Graduates in the UK have a particularly high "rate of return" in increased earnings, in terms of international comparisons. And unemployment rates among graduates are amongst the lowest in the OECD.

Those with degrees were gaining more in higher earnings in 2006 than in 1997, says the report, contradicting claims that increasing the number of graduates would limit the financial benefits in the workplace.

But Mr Schleicher warns of a "polarising" effect, with non-graduates falling further behind.

"In terms of the outcomes - the difference it makes to people's life prospects - those at the high end are having better prospects, those at the lower end are paying a higher price. The spectrum of society is becoming more polarised," he says.

The report says that in the UK the "employment prospects for those who have no upper secondary qualification are particularly poor". For these people who do not achieve the benchmark of five good GCSEs, there is a higher risk of unemployment and a lifetime of low earnings.

Across the OECD, the employment rate for such under-qualified adult men is 73% - in the UK it is only 60%. The relationship between low qualifications and low income is stronger in the UK than anywhere except the United States.

Graduate economy

The OECD's figures show that higher education is becoming something that most young people in industrialised countries will experience.

37% of 25-34 year olds have degrees
In 2006, 12th highest graduation rate in OECD, compared to fourth in 2000
Above average university entry rates for first time in six years
in 1997, earning advantage for graduates over non-graduates was 53%, in 2006 the advantage is 59%
High levels of overseas students, particularly at postgraduate level
High proportion of science students
High tuition fees by European standards
Public spending on higher education rose by 48%, private spending by 53%, between 2000 and 2005

Mr Schleicher says there appears to be no sign of this trend diminishing.

On the question of whether there will be an upper limit to the number of graduates in the workforce, he says: "We could have asked the same question a century ago for secondary education? There is no reason the assume this will level off soon."

The economy benefits from a better-educated workforce, individuals gain financially from having a degree and the labour market has a growing number of vacancies for graduates. With such conditions, he says that the growth in participation in university will only continue further.

Mr Schleicher says the growth in graduate numbers - with countries such as Iceland having graduation rates in excess of 60% - is part of the change in the composition of the workforce, with a shift towards high-skilled jobs.

Although many students might drop out of courses, in Australia, Finland, Poland and Sweden, more than three quarters of school leavers enter a degree course.

There are different patterns for funding this university expansion, he says, identifying three main international trends.

There are Scandinavian countries which use high levels of taxation to pay for high participation rates; there is a mixture of tuition fees and public spending, such as used in the UK and Australia and there is a more traditional reliance on state funding, used in continental Europe.

Although unpopular, tuition fees have been a successful funding model for an expanding system, he says. The impact of getting rid of fees would be likely to be a lowering of student numbers, he says, based on the experience in Ireland.

The least effective are the systems of mainland Europe, says Mr Schleicher, which have "clung to an old system" with state support straining to match the need for expansion.

"The OECD figures highlight the high quality of our higher education system and UK graduates still enjoy a better return on their investment than most OECD countries," says Higher Education Minister Bill Rammell.

“Having a workforce with graduate level skills has never been more important to the economic success of our country and this report shows that the number of skilled jobs still outnumbers the supply of students with higher education qualifications which is why we are committed to increasing participation."

UK education gap 'frightening'
13 Jun 01 |  Education
UK struggles in university race
13 Sep 05 |  Education
Overseas student numbers double
12 Sep 06 |  Education

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