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On the earning potential of degrees

Just because more information is better doesn’t make some information bad.

A Ministry of Education report comparing the incomes of tertiary graduates across fields and levels has been gaining attention in the last few days.

The career decision a school leaver makes at the age of seventeen has got to be the single most uninformed decision they make in their life. Information on how various occupations work is hard to come by. Many teenagers don’t even know what careers exist; far more have no idea what they’ll enjoy. School leavers are forced to make a gamble: while you’re not bound to the degree you choose, you’re still closing many doors.

It should follow that whatever information we can provide to our next generation, we should. But the report has received strong criticism from many quarters for emphasising money or having no impact. These criticisms rely on some rather unfair expectations; I struggle to see how they make the report worthless.

For the love or for the money?
Firstly, many people are struck by the apparent emphasis on earnings, when the conventional wisdom is to “do what you love”. These people are struck by a false dichotomy: while enjoying your job is obviously important, there’s nothing wrong with having regard to earning potential. In reality, people take both those and many other factors into account.

Even where money is a secondary consideration, potential earnings matter. Someone in pursuit of “what they love” might conclude that they would love engineering and music equally. Since “enjoyment” isn’t helping them make up their mind, they might use expected income as a tie-breaker.

The report doesn’t claim for a moment that money is everything. On the contrary, it says: (section 1.3, emphasis italicised in original)

People choose their study plans for many reasons – what they enjoy, what they are good at, what they capable of and what will get them started on a career. […] This new data on employment rates and earnings shouldn’t determine people’s choices – rather it should be used alongside other sources of information. […] We have set out to add to the information available to help people choose – not to replace existing information.

In fact, one would be worried if everyone just went for their dream job. Markets exist for a very good reason: to encourage suppliers (workers) towards meeting current demands. If more people want to be musicians than the world needs, it’s probably a good idea for some budding musicians to reconsider.

Tell me more, tell me more
Now, one may argue that a report on money itself implies that it should be the focus of its readers, despite those disclaimers, and prefer a report covering their own preferred factors. Or they may argue that the analysis is limited, and advocate a report with more data (short-term variations, for example). Following that logic, we should never publish anything unless it comprehensively addresses the entirety of an issue by itself. Virtually nothing falls into this category—it’s a tall if not impossible ask. While more analysis is better, the data presented in the report is still an improvement on the lack of data beforehand.

Will it help?
That brings us to critics who feel that the report won’t change very much. The student union president interviewed in the Dominion Post felt as much: “Government needs to get its act together and stop fiddling with a website while Rome burns.”

This is a bit rich. No-one thinks that the report will be a panacea to all our employment woes, nor should it need to be: there is no silver bullet. But the intended effect of the information is fairly obvious. People wishing to go into fields like the fine arts need to at least be aware that that not many who do get much from it. That student who was tossing up between engineering and music, liking and excelling at both roughly equally, should at least consider leaning towards the profession with a skill shortage and likely to see her in higher demand.

This information won’t shift everyone’s choices, but the point isn’t for everyone to become doctors or engineers. Changes in conditions or information always affect people on the margins. If it nudges those cases towards high-demand occupations, and grounds the others’ choices in more realistic expectations, then the report will have achieved its purpose. I find it hard to believe that it will affect no-one at all.

There’s more to be done, of course. More always needs to be done. But this information is still useful. Our seventeen-year-old school leavers don’t deserve the vacuum of information in which they make their life career plans. Rather than criticise the report’s existence, we should embrace it as a first step (and part of a series of reports) and take even more opportunities to fill in the gaps it still leaves behind.

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