Student tuition fees

Forgive me for writing 2 non-medical posts in a row, but this morning's Today programme on Radio 4 contained such an egregious schoolboy error in statistics that I just couldn't resist.

They were discussing student tuition fees, and some new estimates that students starting university next year will graduate with about £50,000 worth of debts. UK readers will doubtless be familiar with the background to this, but for those of you from further afield, this results from a decision to increase student tuition fees from their current £3000 per year to £9000 per year, in what represents one of the most dramatic broken promises from some members of the government for quite a while. And as we're talking broken promises from politicians here, that's saying something. Astute readers will notice that that still amounts to only £27,000 for a 3-year degree course, but the figure also includes the amount students need to borrow for their cost of living.

One of the contributors to the discussion was Professor Michael Arthur, chair of the Russell Group of universities. He attempted to put the figure into perspective by pointing out that people who go to university enjoy higher earnings than those who don't, and gave a figure of £130,000 over a lifetime for this.

There is only one possible response to this: this one. (Any non-UK readers confused by that reference will find the explanation here).

I've blogged about pretty much exactly the same thing before when Vince Cable made the same point, although it's intriguing that the figure seems to have risen from £100,000 when Cable quoted it a year ago.

OK, here's the big problem: correlation does not equal causation.

Let me explain. I dare say that, on average, graduates earn more than non-graduates over their lifetime. Precisely what the figure is is open to dispute (and I raised some concerns about it before when I blogged about Cable's use of the figure), but I'm happy to accept that it's a large number, and may very well be greater than the £50,000 cost of going to university.

But it's not as simple as that. The argument seems to go like this "going to university will cost me £50,000, but on the other hand it will also give me a better job which will make me £130,000 richer, so the net effect is that I'll be better off". But that argument makes the assumption that going to university makes you richer, ie that the relationship between university education and earnings is causal.

That assumption is almost certainly not true. People who go to university are probably different from people who don't go to university in many ways. It's probably reasonable to assume that they are, on average, more intelligent and harder working people in the first place. It's probably also reasonable to assume that more intelligent and harder working people earn more over their lifetime than their less intelligent or lazier peers. So we should not be surprised that people who go to university earn more than those who don't, but it does not mean that a university education is the cause of their higher earnings.

Of course, there are many reasons to go to university other than a purely financial decision. Learning is a fantastic thing in its own right, irrespective of whether it leads to better job prospects. As someone currently studying for his 4th degree, I am very well aware of this.

However, the assumption that choosing to go to university will make you better off financially seems very hard to justify.

I was fortunate to go to university in the 1980s when tuition was still funded entirely by the government, so it was a complete no-brainer for me to do so. If I were 18 again now, I would be facing an extremely difficult decision: go to university, probably end up with a more interesting job, and learn things that would be generally improving, or go straight from school into the labour market, avoid being saddled with huge debts, and probably be better off financially in the long run.

I genuinely don't know what I would do if I were in that position. I feel terribly sorry for all those who have to make that decision now.