Pay-offs to humanities education

Norm asks: "does it even make sense in an economist's terms to write as if there are no significant benefits from education in, broadly, the humanities?"
One answer is in tables 7a and 7b of this paper. It shows that young men with degrees in arts and humanities earn 10% more than men without degrees, whilst women with such degrees earn 30% more than non-graduate women; the difference is partly because non-graduate women earn less than men.
In this sense, arts education pays even in the most philistine economistic sense.  Indeed, the chief executives of three of the UK's biggest banks - Stephen Green at HSBC, John Varley at Barclays and Andy Hornby at HBOS - all read humanities: PPE, history and English respectively. 
However, these returns to degrees come only if graduates can get graduate jobs. And the proportion that do so has fallen in recent years - to just two-fifths for men. And arts graduates - men and women- who don't get graduate jobs earn no more than non-graduates. Mind you, male science graduates who don't get graduate jobs do even worse.
So, if you can get a graduate-level job, there are financial pay-offs to humanities education, especially for women.

Comments

[Bob B]

FWIW according to this league table of graduate salaries from The Times in August last year, the salaries for some arts/humanities jobs are rather low, with or without a degree:
http://www.timesonline.co.uk/tol/life_and_style/education/good_university_guide/article2253011.ece

However, it is surely gratifying to see that economists, on average at least, are so highly regarded.

[Luis Enrique]

'course it does. You just introduce a variable capturing the satisfaction of reading Proust on the tube into the utility function.

[dearieme]

But if a youngster isn't bright enough to do science, what then?

[Bob B]

"But if a youngster isn't bright enough to do science, what then?"

Perhaps, an illustrious career as Director of Communications for New Labour such as Alastair Campbell attained with his 2:1 in Modern Languages from Cambridge after attending a selective school in Leicester.

"You just introduce a variable capturing the satisfaction of reading Proust . . "

Gordon Brown must surely be deeply impressed with any mention of Proust and: A la researche du temps perdu.

Reference to the dire consequences for Britain of joining the European Exchange Rate Mechanism in October 1980, which he personally cheered on, is one of his favourite pieces of spin to distract attention from present policy debacles but then he is a historian by education, not an economist.

As Emmanuel Goldstein in George Orwell's Nineteen Eighty-four put it:

"And if all others accepted the lie which the Party imposed — if all records told the same tale — then the lie passed into history and became truth. ‘Who controls the past,’ ran the Party slogan, ‘controls the future: who controls the present controls the past.’"
http://www.orwell.ru/library/novels/1984/english/en_p_1

[Bob B]

Apologies - The above link to George Orwell's Nineteen Eighty-four no longer works.

But this one does:
http://www.george-orwell.org/1984/2.html

[ad]

"In this sense, arts education pays even in the most philistine economistic sense."

How do you know they would have been incapable of those jobs without the arts degrees?

Perhaps degrees just act as a very expensive intelligence test?

[Bob B]

"Perhaps degrees just act as a very expensive intelligence test?"

That's very likely true for many or even most humanities courses. But degree courses in the physical, life and social sciences and medicine and law include content of technical knowledge and analytical skills which are essential for subsequent careers.

With widespread scepticism about the quality of much schooling nowadays, it's perhaps understandable why employers might want to seek additional signals of competence in job applicants beyond the school leaving exams. After all, there have been many complaints from universities about having to teach essay writing skills to undergrads and about the necessity of having to upgrade maths skills of fresher engineering students.

About 25 years ago there was a piece in The Economist on what happened to philosophy PhDs in American universities where the annual output was greater than the numbers of vacant academic posts becoming available. The answer at that time was that many made subsequent careers in the then burgeoning computer industry where analytical skills and a faculty for precise expression were valued skills in both hardware and software.

[Planeshift]

"But if a youngster isn't bright enough to do science, what then?"

A career in marketing awaits. No doubt a more financially rewarding career as well.

[Blissex]

«"In this sense, arts education pays even in the most philistine economistic sense."
How do you know they would have been incapable of those jobs without the arts degrees?
Perhaps degrees just act as a very expensive intelligence test?»

Usually art degrees are a very expensive wealth test: people who don't have to worry about getting a prestigious job either because they don't need one or because they are entitled to one may enjoy doing an arts degree for the sheer fun of it.

«However, these returns to degrees come only if graduates can get graduate jobs. And the proportion that do so has fallen in recent years - to just two-fifths for men.»

Well, the number of people doing degrees has increased, the number of people whose background guarantees a good job even with an art degree has probably stayed constant or decreased.

It would be rather interesting to see the percentage of art graduates with an independent sector and Oxbridge education who are employed at graduate level and how they are doing economically. The others probably have just wasted time and money.

[Bob B]

"It would be rather interesting to see the percentage of art graduates with an independent sector and Oxbridge education who are employed at graduate level and how they are doing economically. The others probably have just wasted time and money."

I'm not convinced about that.

"WOMEN university students now outnumber men across all subject areas, from engineering to medicine and law to physical sciences."
http://www.timesonline.co.uk/article/0,,2-2356965.html

With some truth, it used to be said that: "If you educate a man you educate a person, but if you educate a woman, you educate a family." - Rudy Manikan

Besides:

"Men are more likely than women to be unemployed six months after graduating from first degree, Masters and PhD courses, according to research."
http://news.bbc.co.uk/1/hi/education/4929958.stm

Btw the latest edition of Social Trends (38), just out, confirms that pupils attending non-maintained schools comprise only 6.7% of all pupils at school.

[jameshigham]

This will cheer up those hordes out there who were beginning to thing the humanities degree was a one way ticket to Queer Street.

[Alex]

Ben Verwaayen, CEO, British Telecom - MA International Relations, like me.

[NVQ Level 3]

I'm a science graduate and so far i'm yet to see the full benefit of it. 4yrs of hard labour.