Do you remember opening the envelope with your Leaving Cert results? Can you still feel the anxiety, the hopes, the disappointments and then the calculations, totting up points to see if you made the cut?
This morning, close to 60,000 teenagers will receive their Leaving Cert results. The Leaving Cert remains one of the few collective group experiences that most Irish children have. It’s the educational equivalent of national military service.
Underpinning the annual Leaving Cert event and the points race which unfortunately goes with the territory, is the understanding that third level education will give teenagers a head start in the jobs market.
This is a type of social contract. Many thousands of students today will hope that their Leaving Cert results will be a springboard to college and that college itself will be a springboard to a better career.
Up to a point, this pact between students, parents, universities and employers still holds true.
However, this understanding is beginning to fray as the cost of third level education rises and the wages graduates are achieving are falling.
Recent trends in globalisation – including hyper-competition in the global jobs market from Asian students – indicate that the return to education may well be falling for the average student. Remember it is the average student – not the superstars – that third level education is supposed to train and educate. The average student enjoys what is known as the “university experience” – the friends, the networks and the good times. In a world of cheap, sometimes superior online education, the college experience is one of the few things that universities can honestly offer.
The other, of course, is status. The stamp of a degree from such and such a place is still used as a universally recognised quality control mechanism.
Acquiring this degree traditionally propelled these students up the job escalator, giving them a much better chance of a much better job.
Does this still hold? Are most universities still a passport to a better career or is this only the case for the very best ones?
If a third level education no longer helps young adults achieve a better job and a better wage, then the universities have a big problem because education is very expensive.
And it is expensive not just for the students and their families but for the rest of the taxpayers who foot the bill.
Yesterday, this paper published a survey from the Credit Unions of Ireland, offering a glimpse of the financial cost of third level education and the sacrifices that parents are making.
Some 80pc of parents today support their child with college-related costs. This is costing €421 per month on average per child. That’s close to €10,000 before tax. Four out of 10 parents use their savings to fund third level education and a quarter of all parents borrow from their local credit union to fund college.
On average, parents who are using their savings put aside money for eight years – every month – in order to finance their children’s expenses. And remember this is taking place in a country where the State picks up the lion’s share of the tab for fees.
Where there are registration fees, seven out of 10 parents said that the family budgets are squeezed by the increased fees. Half of students eligible for grants didn’t get them on time and, as a result, one-third of families that are supposed to get grants stated they had to sacrifice spending on essential household bills because of the delays.
Now let’s come to the State’s portion.
THE annual cost per student in post-secondary education in Ireland was €12,051 – above the OECD average of €10,500. This is the cost of the universities. Each four-year undergraduate degree costs an average of €48,204 per student.
Taken together with what the parents pay, which according to the Credit Unions is as much as another €40,000 before tax, we are talking about a very large amount per degree. Now look at the return that the graduates are getting for that. Remember the old understanding that the university education gave the students a marked leg-up in the jobs market?
We know youth unemployment is running at unprecedented levels and we know that graduates are emigrating in much greater numbers than non-graduates.
Could it be that the social contract is breaking down?
Could it be that the graduate jobs market is now truly international and the competition never more fierce because of globalisation and the impact of technology bringing opportunities to people in parts of the world that never before had such opportunity?
For example, just consider the online revolution. Today there are two billion people online. In eight years’ time, there will be five billion. This is three billion new minds, new ways of doing things and new ways of looking at the world coming online and competing in the global jobs market.
Now clearly there are huge opportunities for enterprising young people in this online explosion. Selling online is the future for many sectors and collaboration online will change the way most of us do business. However, for the salaryman or average Irish worker with a degree, there are more threats than opportunities.
The numbers tell the story.
If we look at the number of people in recent years who are unemployed but have said that they have never worked before, we see an increase of 97pc from October 2009 to July 2013. In absolute terms, 5,237 said they were unemployed but had never worked before in 2009; by last month this figure had jumped to 10,337 people. While not all of these people are students the vast majority are likely to be unemployed graduates.
Today, youth unemployment (under 25) is running at 30.4pc. Many people argue that things were just as bad in the 1980s when I was in university but that’s not the case. Throughout the 1980s, youth unemployment averaged 22.9pc. If you are young right now, you have 30pc more chance of being unemployed than you would have had in the bleak 1980s.
The days of a degree propelling you into a safe, well-paid job appears to be a thing of the past. This will have enormous implications for the value for money in going to university, particularly if there is an opportunity cost in staying out of the world of work until after your degree. If they want to survive, middle-ranking universities – all of Ireland’s – will need to train their graduates to be more employable.
Or failing that, graduates will have to become more entrepreneurial in the face of both competition and opportunity abroad.
In terms of the likelihood of the above two, I’d bet on the latter rather than the former.
There are a couple of different issues mixed up here. First is that online education looks likely to make most undergraduate and postgraduate education in Irish universities obsolete very soon. Who would want an expensive degree from UCC or UCG if they could get a cheaper and better one from Oxford or MIT or the Karolinska Institute? University education, like most things, is amenable to both economies of scale and improvements of scale. Bigger will be both better and cheaper and Irish universities are unlikely to be winners in this globalized competition. The other entirely separate problem is the increasing… Read more »
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Why is third level education so expensive?
Have a look at the salary scales and number of hours worked by staff.
Works out at about €150-€200/hr.
Hi David, This is an argument for the introduction of a fee-paying free-market in University education. If economic return is the only things that matters (I realise you are NOT saying that), why should the state pay at all, especially with a flight-risk at the end of it! Here’s a question I’d love an economist to try to answer: what’s the cost of economically restricting access to University education? Anyone who things that on-line education will replace brick and mortar Universities needs to understand that the reason Stanford, MIT, Cambridge etc publish so much of this stuff on-line is that… Read more »
It is far too easy to assume that on-line education can replace on-site education directly. When I was younger I studied at two bricks and mortars universities. Later on I did an MBA that mixed online with classroom work and now I am studying for a BA through the Open University. For mature students who need little guidance it is quite possible to learn effectively independently provided you have the right kind of materials. Distance learning materials are expensive to produce because they need to be tailored for the medium. They are not comparable to classroom lectures. Watching endless Youtube… Read more »
Today, with many people getting leaving results, there is a fair bit of excitement out there. Many of these kids will now have to ponder what to do next. In many cases, they have already being pondering. There is a problem with the Irish second level education system, in that expects you to prepare for the make or break exam at the same time as you have to make decisions about your career. This in itself is a disaster. As a result there is a problem with dropout rates in first year in university. This nneds to be addressed. Number… Read more »
“In terms of the likelihood of the above two, I’d bet on the latter rather than the former.” Agree. Youngsters will have to create their own stake in society as the ‘social contract’ no longer applies to them, they are fodder in the eyes of their elders. There is a palpable disregard for their future, example, a previous large company I contracted for had a respected 6-month graduate program, now they’ve prefixed it with Jobbridge 9-month internships so in total a prospective youngster will have to fund themselves through a 15-month 40hr-week intership/probation period, that’s a YEAR+HALF!, with no guarantee… Read more »
For all the talk of education there is little regard for the one thing crucial to the survival of everyone. How many have any information on basic finance? How many know how to balance a cheque book? How many will know how the financial system operates. How many have an understanding of money, what it is, what is good money, what is bad money.? How many can define what money actually is? Yet that is what they will be working for. Looks like most will be on a fools quest despite or perhaps because of their education. How many will… Read more »
We should learn about this or that or whatever. Be it money science economics politics engineering you name it. Should should should and should. We are forced to super optimise. Result is lower need for people for same level of output. We have super specialisation yet no real crosstalk to allow real interdisciplinary learning. It is a world of silos and yet problems are universal and no one knows how to really link up with all our tech in a way that is useful. Maybe economics is the interdisciplinary glue we need. But it all waffles mostly about how it… Read more »
Look, the problem with Second Level education in this country is that it doesn’t give students a chance to gain any kind of ‘Life Skills. All it basically is, is that it’s a method of getting students to pass exams and to build up points to go on to Third Level education. Then after those same students have gone through a 3 or four year degree course they come out into the world armed with a piece of paper called a degree in whatever and then if they do happen to end up in employment they think that ‘piece of… Read more »
It depends what subject(s) you take. ——————————————- Eight out of 10 IT companies in Ireland say they plan to recruit within the next three months. Says that 51% of companies find it difficult to find employees with the necessary skills. Number of IT vacancies 4,000. According to an EU study, the EU labour market could face an excess demand of 384,000 IT professionals by 2015. Irish digital IT sector is growing – with almost 730 Irish owned digital technology companies employing over 10,000 people and contributing €1.8 billion to the economy. Director of the Irish Software Association Paul Sweetman says… Read more »
Two Irish success stories
Irish astronomer helps measure black hole magnetic field for first time
Irish brothers lead way as tech firm spreads its wings
Soaring college bills set to hit €1,000 a month
Not only is it curtains for the third level student.
As Andy Hoffman says
Sadly, this END GAME is already set in stone; and thus, will occur no matter how many games Washington and Wall Street play. It’s just a matter of time; and when it does, you sure as hell better have your PHYSICAL gold and silver insurance in place – as it just may save you and your family’s lives.
They should teach those students not to believe any government produced statistics. All are manipulated.
* No Economic Recovery Here
* Industrial Production on Brink of Showing Formal New Recession
* For Second Month, Rising Retail Sales Reflected Rising Prices,
Not Rising Consumer Demand
* Real Average Weekly Earnings Fell for Third Month and Year-to-Year
* July Year-to-Year Inflation: 2.0% (CPI-U), 2.0% (CPI-W), 9.6% (ShadowStats)
– John Williams, ShadowStats.com, August 15 2013
Why Ireland should focus on it’s manufacturing base and introduce German style apprenticeships
“Turn on TV3 and the usual pundits are telling us that social welfare deters people from taking jobs. Hundreds of thousands of people (people who pre-2008 took every job going – full-time, part-time, minimum wage, whatever) are now, it appears, refusing to take hundreds of thousands of jobs. And the jobs, apparently, remain unfilled.”