Media Briefings

APPLYING TO UNIVERSITY: It's not just about how smart you are

  • Published Date: April 2017

Risk-averse students who lack parental interest less likely to try for a degree

Family support and attitudes to risk have almost as big an influence on the decision to attend university as ability, according to research by Judith Delaney, to be presented at the Royal Economic Society's annual conference at the University of Bristol in April 2017.

Analysing information from the National Child Development Study, her study compares potential reasons for school leavers not to attend university. If non-university students had the same ability distribution as university graduates, then 25% more people would go to university in the UK, she finds.

But university entrance is also reduced by the other two factors. On the one hand, graduates have riskier wage distributions than non-graduates, even though they earn more on average: if this risk were equalised, 20% more would go to university. On the other hand, if school leavers all had the same parental education and parental interest in education, then the proportion going to university would rise by about 12%.

As a result, the author says, grants to attend university may not be the best way to encourage attendance: ‘Early childhood interventions, such as access to high quality pre-schools would yield large effects on university attendance with an increase of almost 20% – more than double the effect of implementing equally costly increases in maintenance grants.’

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Why don't more people go to university given that the average university graduate earns roughly 30% more than those who do not go to university? Surely, if the benefits from going to university are so large, it would make sense for most people to want to go to university?

But individuals (not like economists) care about more than just the wage they earn – they also care about risk! An individual may think that despite the fact that the average wage of university graduates is significantly higher than the average wage of non-graduates; this may not be the case for a typical university graduate!

If there is a distribution of potential wages and a handful of graduates hit the big time and earn millions, then this will tend to push up the average wage of university graduates while the majority of university graduates may earn significantly less than this!

Therefore, given that there is no guaranteed income that one obtains after graduating from university, this risk or uncertainty may be enough to discourage many people from going to university and paying high tuition fees if they are not guaranteed a sure return on their money!

Another factor why many individuals may decide not to go to university is their ability – both cognitive and non-cognitive ability. Those with lower cognitive ability may think that they will find the coursework too difficult while those with lower soft skills (or non-cognitive ability) may not have the motivation or determination to succeed in university.

It is also true that of all university graduates, those with higher ability tend to command higher wages in the labour market so that the benefits of university to a low ability individual may be substantially smaller.

Family background may also have a large impact on the university decision – individuals from better off backgrounds as measured by parental education and parental interest in education may attend better schools at younger ages, may have better peers and grow up in better neighbourhoods and may have a more favourable attitude towards university.

Using a UK cohort study, namely the National Child Development Study, I find that all three of these factors are important factors in determining why many people go to university.

The data illustrate that although university graduates face lower unemployment rates, they face substantially higher wage risk and this tends to dominate such that overall university graduates have riskier earnings.

I find that if the university risk could be made equal to the labour market risk facing those leaving school with just A-levels, then the proportion going to university would go up by about 20% in relative terms.

Second, if we could give non-university students the same ability distribution as university graduates, then 25% more people would go to college; while if we could give them the same family background distribution as measured by parental education and parental interest in education, then the proportion going to college would go by about 12%.

Given these findings, I then ask, what kind of policy could the government implement to get more people to go to university? I find that early childhood interventions, such as access to high quality pre-schools would yield large effects on university attendance with an increase of almost 20% – more than double the effect of implementing equally costly increases in maintenance grants.

ENDS


To go to university or not? The role of ability, family background and risk

Contact:
Judith Delaney
University College London
Email: judithmdelaney@gmail.com