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As higher education has expanded, it has become increasingly obvious that not all universities and not all degrees are equal: and now that students are paying for their education they are beginning to behave more like consumers. At some universities they are demanding more for their money-more hours of tuition, harder assignments. Many also seem likely to choose courses with the largest possible future earnings potential. In the past a university degree in Britain promised a bigger income premium than in most other OECD countries. Now that its scarcity value has gone, says Anna Vlenoles of London University’s Institute of Education, initial average returns to degrees are very small. But those who study “hard” subjects such as accountancy, law, medicine, engineering or math continue to enjoy a premium. That may start a swing back to those subjects. A similar invisible hand may also work in the market for vocational qualifications. Until now, most of these have attracted little in the way of extra pay, and some have actively put off potential employers: the Institute for Fiscal Studies, a think-tank, calculates that low-level vocational qualifications actually inflict a pay cut of 5-20% on their holders, who are labeled as dummies. As the financial value of some university degrees sinks towards zero, training as a plumber or an engineer will look more attractive. And such jobs cannot easily be transferred abroad. Britain unlike Germanv, has never had a coherent system of vocational education, despite all the talk about the importance of skills and human capital. Critics say that new paper qualifications have raised young people’s hopes, but have not led either to university or to a job. That is particularly true among some of Britain’s ethnic minorities.
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