Is university worth it? Earnings, jobs and costs compared

Do graduates earn more than people without a degree?

In most countries, yes. Employees with tertiary education, which includes university degrees and shorter higher-education diplomas, usually earn more than the average employee. The gap is often wider in countries where fewer adults have a degree, and narrower where many people go to university and wages are more equal.

Read these averages with care. They compare tertiary-educated employees with all employees, so they do not show what you personally would earn with or without a degree. Part of the gap comes from who goes to university, not only from the degree itself. The figures also cover employees only, not self-employed people, who make up a large part of the workforce in many countries.

The table below shows how much more employees with tertiary education earn than all employees in a selection of countries, using official data from the International Labour Organization (ILO).

Are graduates less likely to be unemployed?

In many high-income countries, adults with tertiary education have lower unemployment rates than average, and they are often less affected when the economy slows down.

The pattern is not the same everywhere. In some lower- and middle-income countries, graduates can have higher unemployment rates than people with less education. People with little education often cannot afford to stay unemployed, so they take any work available, often in the informal economy. Graduates may wait longer for a formal job that matches their qualification, and in some places there are more graduates than skilled jobs.

If graduate unemployment is high where you live, your choice of subject, practical experience during your studies and job-search skills matter even more.

Unemployment figures also miss underemployment: graduates who have a job, but one that does not need a degree. This is a concern in many countries, especially in the first years after graduation. The table below compares unemployment rates for adults with tertiary education and for adults at all education levels.

What does a degree really cost?

The full cost of a degree is more than tuition. Grants, scholarships and fee waivers can reduce it a lot, so check what is available from your government, the university and charitable organisations before you rule a degree out.

How you pay also matters. In countries such as Australia and England, government student loans are repaid through the tax system only when your income is above a set level, so they work differently from ordinary bank loans. Private loans with fixed monthly repayments carry more risk if your income turns out lower than expected.

Not finishing is the most expensive outcome, because you pay the costs without getting the qualification. Choosing a subject you are motivated by, and checking the academic and personal support a university offers, reduces that risk.

When you add up the full cost, include all of these:

• Tuition fees, which range from free or very low at public universities in some countries, such as Germany, Norway and Argentina for local students, to high in others, such as the United States and England.
• Living costs, including accommodation, food, transport and study materials, which can be higher than the fees.
• Lost earnings: the income you could have earned by working during your years of study.
• Interest and repayments on any loans.
• Extra years if you repeat a year, change course or need postgraduate study for your career.

Which degrees pay off most?

Returns vary a lot by subject and institution. Official data from several countries shows that medicine, dentistry, economics, mathematics, computer science and engineering tend to lead to strong earnings. Some creative and arts subjects have lower average earnings, although successful graduates in those fields can do very well.

The institution matters too, mainly through the quality of teaching, links with employers and support to help you finish, not only through its name. A well-taught programme with strong work placements at a less famous university can lead to better outcomes than a poorly matched programme at a prestigious one.

Degrees that lead to regulated professions give a clear route but take a long time. Becoming a doctor means a medical degree that typically takes five to six years, or a graduate-entry programme in countries such as the United States, followed by years of supervised training. Becoming a lawyer usually requires a law degree or conversion course, then professional training and exams. The rewards can be high, but so are the time and competition involved.

Some well-paid fields do not strictly require a degree. Many software developers studied computer science, but employers also hire people who can prove their skills through projects. In fields like this, a degree still helps with graduate programmes, promotion and work visas, but it is not the only way in. Subjects such as economics and computer science also keep many career options open.

When might university not be the best choice?

A degree is not the right investment for everyone, or at every point in life. Our guide to alternatives to university explains apprenticeships, vocational colleges and other routes in more detail.

It may be worth considering other routes if:

• The career you want is usually entered through training on the job or an apprenticeship, as with many skilled trades.
• Your country has a strong apprenticeship system, as in Germany, Switzerland and Austria, where apprentices train with an employer and at a vocational school for two to four years.
• You are not motivated to study now and would rather work first. Many people start a degree later with clearer goals.
• The costs and debt would be high compared with the likely earnings in the jobs you want.
• A shorter qualification, such as a two-year diploma or associate degree, would get you into the same job.

How to decide if a degree is worth it for you

Instead of asking whether university is worth it in general, ask whether a specific degree is worth it for you.

Degrees also affect mobility. Many skilled-worker visa systems require a degree or award extra points for one, and regulated careers are usually open only to graduates. If you might want to work in another country, this can be a strong reason to get a recognised degree.

Education also has benefits that are harder to measure. Data from many countries links tertiary education with better health, higher trust in others and more involvement in community life, although it is difficult to separate the effect of the degree from other advantages graduates may have.

With all of this in mind, work through these steps:

• Name two or three careers you are aiming for.
• Check whether each career requires a degree, prefers one or accepts other routes.
• Estimate the full cost, including living costs and lost earnings, and look for grants, scholarships and fee waivers.
• Look at official graduate outcome data for the subject and, where available, the institution.
• Be honest about whether you are likely to finish, and what support you would need.
• Compare the degree with at least one alternative route into the same career.
• Consider benefits beyond pay, such as knowledge, networks, confidence and options to work abroad.