Amid plummeting university rankings, reduced funding and constrained employment prospects, the Economist has come out with a figure that might still convince of the merits of a college education: the net benefit of having a university degree in Ireland is far greater than any other OECD country.
Yes, using Organisation for Economic Co-operation and Development figures, the Economist shows that the lifetime net benefit of getting a degree in Ireland – compared to not getting one – is some $350,000 (€328,000).
This means that someone can expect to earn a net, ie after tax, income of some $350,000 more over their lifetime than someone who does not have a degree.
This is far in excess of the $80,000 or so benefit to the Swedes of having a degree, and more even than the $300,000 benefit in the United States.
Price levels
In the UK the benefit is of the order of about $230,000, and is less than $200,000 in both Germany and France. The figure is derived using purchasing power parity figures, rather than market exchange rates, which aim to eliminate the differences in price levels between the various country comparisons.
While it acknowledges the high ongoing rates of youth unemployment in Ireland – figures for November 2016, for example, show that the unemployment rate for people aged 15-24 years was 15.5 per cent, compared with 7.3 per cent overall – the Economist also makes a distinction.
It finds that the unemployment rate for those with degrees is 8 per cent, but it swells to more than 20 per cent for those without a degree, and to nearly 40 per cent for secondary school drop-outs.
Graduates
Part of the reason why Irish graduates benefit so strongly from their degrees are low income taxes, the Economist says, noting that "Irish graduates keep most of their earnings, as do Americans".
But, while graduates might be heartened to read that there is significant value in their degree, it surely must also raise the question as to why there is such a large discrepancy in earnings between those who have a degree in Ireland, and those who don’t.
As the magazine finds, “The country’s wealth now goes disproportionately to workers with letters after their names”.
