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Higher vocational STEM education can lead to better earnings than degrees, study finds

Earnings of people achieving higher-level vocational qualifications in STEM subjects can exceed those of people who pursued the same subjects at a university level, a study has concluded.

The findings come from the first comprehensive study comparing the earning outcomes of young people pursuing higher vocational qualifications with those of degree holders, was published by NIESR researchers affiliated with the Centre for Vocational Education Research (CVER).

Analysing data from hundreds of thousands of English secondary school leavers the research finds that while by age 30 earnings of degree holders in many subject areas are consistently higher than those of people with higher vocational qualifications, people achieving Level 4-5 qualifications in STEM (Science, Technology, Engineering and Mathematics) subjects earn more than people with degrees from many universities.

People with higher-level vocational qualifications (Levels 4-5) overall show relatively high earnings early in their working lives because more of them work before or during their studies. This is very different to degree holders, who are more likely to pursue full-time education up to the end of their studies. Over time, average earnings converge and eventually are higher for degree holders.

However, by the age of 30, those achieving higher vocational qualifications in STEM subjects are observed to have higher average earnings than degree holders in the same broad subject area from Non-Russell Group universities. This finding remains consistent when controlling for a wide range of further characteristics.

NIESR's Associate Research Director Stefan Speckesser, who co-authored the report said:

"Data on earnings outcomes are extremely valuable as young people and their families approach the choice of higher education. Higher vocational education offers an important – if massively under-explored – alternative choice of tertiary education, often run by local colleges and resulting in lower debt for students compared to those incurred by degree holders (or, if within an apprenticeship, no debt at all because of employer funding).

Our study shows that for young people interested in specific professional roles, higher vocational education could indeed offer useful, cheaper and ultimately more lucrative alternative to university."

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