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Using Graduate Earnings Data in the Regulation of Higher Education Providers. Research Report

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Title: Using Graduate Earnings Data in the Regulation of Higher Education Providers. Research Report
Language: English
Authors: Jack Britton, Kate Ogden, Ben Waltmann, Department for Education (DfE) (United Kingdom), Institute for Fiscal Studies (IFS) (United Kingdom)
Source: UK Department for Education. 2025.
Availability: UK Department for Education. Castle View House East Lane, Runcorn, Cheshire, WA7 2GJ, UK. Tel: +44-37-0000-2288; Fax: +44-19-2873-8248; Web site: http://www.education.gov.uk
Peer Reviewed: N
Page Count: 124
Publication Date: 2025
Document Type: Reports - Research
Education Level: Higher Education
Postsecondary Education
Descriptors: Foreign Countries, Outcomes of Education, Higher Education, College Graduates, Education Work Relationship, Data Use, Educational Policy, Income, Institutional Evaluation, Measurement Techniques
Geographic Terms: United Kingdom
ISBN: 978-1-83870-647-0
Abstract: The purpose of this report, which was commissioned by the Department for Education (DfE) in September 2023, is to set out options for making use of graduate earnings data to support the Office for Students' (OfS's) regulation of the higher education sector. Our aim is a measure of graduates' earnings outcomes that would be as informative as possible about higher education providers' (HEPs') success, or otherwise, in equipping graduates with skills that are useful for them in the labour market. There are three main reasons to explore the use of earnings outcomes in the regulation of the higher education sector. The first is that the impact of a higher education course on graduate earnings will be an important aspect of a course from the point of view of many prospective students. Second, earnings outcomes are an indirect measure of course quality: all else equal, higher-quality courses will usually lead to higher graduate earnings. Third, unlike many other potential measures of course quality, graduate earnings can be measured objectively, accurately and with near-universal coverage. However, there are also clear drawbacks. Other aspects of labour market progression, such as job security or fulfilment at work, may be as or more important for prospective students. This is especially relevant in subject areas such as creative or performing arts, where success as an artist may entail "lower" earnings than what the same person would have earned in a different occupation. A focus on earnings as an indirect measure of course quality could lead providers to focus on skills that are valuable in the labour market at the detriment of other aspects of course quality. There are practical challenges as well. It will never be possible to completely disentangle differences in course quality from differences in the characteristics of a course's intake. Meaningful earnings data are only available several years after each cohort's graduation, so changes in course quality can only be picked up with a long lag. The advantages of an earnings metric for regulation need to be weighed against these drawbacks, along with the potential additional cost of implementing it. The scope of this report is limited to undergraduate students, but similar metrics could also be developed for other levels for study. The options explored are designed to fit into the existing system of student outcome measures used in university regulation, which is described in Section 2. The process of developing such an earnings metric can usefully be divided into two steps. The first step is to set out criteria by which a potential regulatory metric can be judged. These criteria may be conceptual or practical. Conceptually, it needs to be decided what the target or goal for a metric is; in other words, what the metric would ideally be measuring in the absence of data constraints. Practical criteria may relate, for instance, to the transparency of a metric or the ease of implementing it. Conceptual and practical criteria for evaluating a regulatory metric are set out in Section 3. The second step is to assess how different possible metrics perform against these criteria. Section 4 presents an overview of the available data, which inherently limit the range of feasible metrics. Section 5 introduces the baseline metric methodology, which serves as a framework for subsequent discussions. Section 6 applies this baseline metric to the 2014/15 and 2015/16 graduation cohorts, presenting the results. Section 7 assesses the performance of the baseline metric against the criteria established and compares it with the existing OfS progression metric. Section 8 conducts an extensive sensitivity analysis, exploring how the estimates change under various methodological choices. Section 9 considers options for incorporating labour market participation into the metric. Finally, Section 10 summarises the authors' key recommendations.
Abstractor: ERIC
Entry Date: 2025
Accession Number: ED676816
Database: ERIC
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  Data: Using Graduate Earnings Data in the Regulation of Higher Education Providers. Research Report
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  Data: UK Department for Education. Castle View House East Lane, Runcorn, Cheshire, WA7 2GJ, UK. Tel: +44-37-0000-2288; Fax: +44-19-2873-8248; Web site: http://www.education.gov.uk
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  Data: 978-1-83870-647-0
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  Data: The purpose of this report, which was commissioned by the Department for Education (DfE) in September 2023, is to set out options for making use of graduate earnings data to support the Office for Students' (OfS's) regulation of the higher education sector. Our aim is a measure of graduates' earnings outcomes that would be as informative as possible about higher education providers' (HEPs') success, or otherwise, in equipping graduates with skills that are useful for them in the labour market. There are three main reasons to explore the use of earnings outcomes in the regulation of the higher education sector. The first is that the impact of a higher education course on graduate earnings will be an important aspect of a course from the point of view of many prospective students. Second, earnings outcomes are an indirect measure of course quality: all else equal, higher-quality courses will usually lead to higher graduate earnings. Third, unlike many other potential measures of course quality, graduate earnings can be measured objectively, accurately and with near-universal coverage. However, there are also clear drawbacks. Other aspects of labour market progression, such as job security or fulfilment at work, may be as or more important for prospective students. This is especially relevant in subject areas such as creative or performing arts, where success as an artist may entail "lower" earnings than what the same person would have earned in a different occupation. A focus on earnings as an indirect measure of course quality could lead providers to focus on skills that are valuable in the labour market at the detriment of other aspects of course quality. There are practical challenges as well. It will never be possible to completely disentangle differences in course quality from differences in the characteristics of a course's intake. Meaningful earnings data are only available several years after each cohort's graduation, so changes in course quality can only be picked up with a long lag. The advantages of an earnings metric for regulation need to be weighed against these drawbacks, along with the potential additional cost of implementing it. The scope of this report is limited to undergraduate students, but similar metrics could also be developed for other levels for study. The options explored are designed to fit into the existing system of student outcome measures used in university regulation, which is described in Section 2. The process of developing such an earnings metric can usefully be divided into two steps. The first step is to set out criteria by which a potential regulatory metric can be judged. These criteria may be conceptual or practical. Conceptually, it needs to be decided what the target or goal for a metric is; in other words, what the metric would ideally be measuring in the absence of data constraints. Practical criteria may relate, for instance, to the transparency of a metric or the ease of implementing it. Conceptual and practical criteria for evaluating a regulatory metric are set out in Section 3. The second step is to assess how different possible metrics perform against these criteria. Section 4 presents an overview of the available data, which inherently limit the range of feasible metrics. Section 5 introduces the baseline metric methodology, which serves as a framework for subsequent discussions. Section 6 applies this baseline metric to the 2014/15 and 2015/16 graduation cohorts, presenting the results. Section 7 assesses the performance of the baseline metric against the criteria established and compares it with the existing OfS progression metric. Section 8 conducts an extensive sensitivity analysis, exploring how the estimates change under various methodological choices. Section 9 considers options for incorporating labour market participation into the metric. Finally, Section 10 summarises the authors' key recommendations.
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      – Text: English
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        PageCount: 124
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      – SubjectFull: Foreign Countries
        Type: general
      – SubjectFull: Outcomes of Education
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      – SubjectFull: Higher Education
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      – SubjectFull: College Graduates
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      – SubjectFull: Measurement Techniques
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      – SubjectFull: United Kingdom
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      – TitleFull: Using Graduate Earnings Data in the Regulation of Higher Education Providers. Research Report
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