Professor Robin Naylor discusses his research collaboration in measuring the worth of a University degree

What research projects are you currently involved with?

I’m involved in a variety of projects – many of them are joint with Jeremy Smith, our head of department. He and I have a research collaboration which goes back approximately 20 years, in which we have looked at a variety of aspects regarding students entering university, being at university, and going on beyond university – by which what I mean is, we’ve looked at what are the characteristics of students associated with them performing very well, or less well, at university, and similarly, what determines, or is associated with, the kind of things they go on to do after university, whether that’s a postgraduate degree, or going into the labour market.

We’ve also looked at how things have changed over time, because over this period of time there’s been a huge increase in the participation of young people in higher education. The early cohorts of students whose data we were analysing were leaving university in the mid-1980s to the mid-1990s, a period of time when the participation rate rose from around 14 per cent to around 30 per cent. Since then it’s grown to around 40 per cent. So one of our interests was looking at whether the financial return to a degree had changed over that period – because a simple approach might be to say there’s a big increase in supply, so the scarcity has gone down, and the labour market price might also go down. But we – and other research teams – have found that hasn’t happened, because at the same time that there has been a big increase in supply, there has been a big increase in demand as well, because the world of work has been changing. Technological change is biased towards skills, so those countries that want to stay competitive in the global marketplace should be investing in the skills of their young people through education and higher education. The work of the future will need those capabilities.

We’ve also looked at how the return to a degree – how much you earn with your degree compared to how much you might have earned had you not got a degree – has changed. When tuition fees were first brought in for Home/EU students, in 1998, the evidence that was cited by policymakers was that the return to a degree is something like £400,000 over a lifetime. In economics, we tend not to talk about a sum of money, because that becomes less meaningful over time, so the evidence that’s often cited by economists would be the percentage by which your earnings with a degree are higher than they are likely to have been – and the figure around which there’s a consensus is something like 15 to 20 per cent on average. So while our key finding is that there is still a very high return for getting a degree, as a caveat it’s important to note that there is a lot of variation around the average. Because there are no upfront fees it’s still a very good investment: if you’re one of the people for whom it turned out not to be a great financial return, you’re not indebted – the loan is eventually expunged. The evidence is that even the £9,000 fee doesn’t seem to have deterred applications from people from less affluent backgrounds, which is fantastic, but we shouldn’t be complacent about that, and the sector must never let governments be complacent about this. It’s the absence of upfront fees combined with income-contingent repayments that are absolutely crucial to this.

We also find there’s a lot of variation in graduate market outcomes by how well you do at university – in the language of economics, whether that’s a causal effect or a correlation is a research question still to be addressed properly. And the current research project that Jeremy and I have on the go, with Gianna Boero, is an attempt to establish whether there is a causal impact of having done well at university on your earnings.

Why did you choose this research field?

Jeremy and I have always had responsibilities within the department which included the management of the undergraduate and graduate programmes. At various times we’ve been Directors of Studies and Senior Tutors with responsibility for pastoral support – and in those roles we were interested in our own students: for example, we wanted to know whether students with certain A level subjects do better than others, to improve our admissions policies and our support mechanisms. And so we were interested in conducting statistical analysis of the relationship between student outcomes at university and the characteristics of those students.

Twenty-odd years ago it started with wanting to look at the data for our own students, and then we got ambitious and wondered if we could find data for the entire university, which would give us more robust results, and in the course of exploring that, we hit upon a Eureka moment, which was that we could get data on every student on every degree course in every university in the UK, going back for a number of decades. So suddenly we were dealing with around a million student records. Nowadays that sounds banal, because we’re in the world of big data, when people do analysis based on many millions of data points, but in the late 1990s, it felt like rather a lot of data points! And what we found remains one of the more memorable moments in my academic life. We found – and this has been replicated by many people since - that there was a big difference in the outcomes of students according to the kind of school they had attended before university. We found that on average, if you looked at two students, one of whom had been to an independent school, and another, in all other respects identical but who had been to a state school, the latter outperformed the former at university by a large margin. We found this in almost every subject, at almost every university.

And this demonstrates that while it’s quite right that admissions selectors place significant importance on prior qualifications, they’re not an absolute gold standard in identifying those with the greatest ability to benefit from a degree. We need to look more widely than merely at prior qualifications if we want to tap all available talent.

This analysis and the findings we established attracted more press and media attention than anything else I have worked on to date (coverage included items on the Today Programme, Newsnight, the Economist, the FT, most of the national newspapers and, especially, the Daily Mail!). The work has been influential in policy circles and within the HE sector.

Why did you decide to become an Economist?

It was a genuine desire to understand both what made countries rich and, more importantly, what within countries determined why some people were richer than others – a rather naïve 17-year old’s question! But fairness and equity are still a driving force in my economics, lying behind my work on student outcomes and widening participation, for example. Going back 40 years, I applied to the LSE. This was both because of its academic credentials, but also because of its institutional origins and for what it represented culturally. Paris had had its 1968 student revolts, and the nearest we had in the UK was the LSE, it had that kind of aura around it.

I loved my time at LSE and I wanted to do further study and research in Economics, so the next step was an MPhil in Economics at Oxford. I finished that in 1983 – a time of huge public expenditure cuts, when there were very few positions available in UK universities. I did 6 months in the Civil Service as a government economist and realised that actually my true calling was a research career in economics

Why did you join the Economics department at Warwick?

Warwick was then, as now, regarded as one of the very top departments for Economics in the UK. When I came for my interview in 1986 it also stood out as a department where the working culture was very collegial and friendly and supportive – and, happily, that is also the case in 2019.