New research on the importance of non-cognitive skills -- such as conscientiousness, self-esteem and feeling in control of one's life -- for graduates' earnings potential offers important lessons for young people receiving their A-level results.
The study by Gerda Buchmueller and Professor Ian Walker, of Lancaster University Management School, confirms previous evidence on the importance of curriculum choice: STEM subjects add more value in terms of earnings than Arts subjects. Moreover, graduates from elite institutions, on average, earn more than those from less prestigious establishments.
But even within any given course, the variance in graduate earnings is still large -- despite prior ability, as measured by cognitive tests such as A-levels, having little variation across students within a course. What varies are their non-cognitive skills, and these differences drive degree class -- and give rise to large pay differentials.
The research will be presented at the annual congress of the European Economic Association in Manchester this month.
Co-author Gerda Buchmueller, from Lancaster University's Department of Economics, said: "While what you learn matters, how well you master what you learn is important too. Indeed, earnings differentials between degree classes are as large today as they were 20 years ago, even though four-times more students now earn first-class degrees.
"The analysis points to the importance of university students' own skills as inputs into their own further intellectual development: non-cognitive skills complement cognitive ability, as well as complementing good quality teaching."
The authors pointed to important lessons for young people:
Professor Walker said: "Employers remunerate skills, not qualifications. Students who choose to treat university as consumption will take away only memories -- and unfortunately for taxpayers, the loan system makes them pick up much of the resulting debt.
"But students who choose to engage in university as an investment opportunity will, on average, go on to develop improved skills -- and the taxpayer will be forever in their debt."
Materials provided by Lancaster University. Note: Content may be edited for style and length.
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