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What does the Longitudinal Education Outcomes data tell us?

​​The publication of the Longitudinal Education Outcomes (LEO) data today has given the sector an opportunity to delve into the detail of the sector. 

This data is significant because it tells us about employment and earnings of graduates based on HMRC administrative data, rather than survey data from the Destinations of Leavers from Higher Education. Securing access to this data was a significant success by BIS. We know that going to university is a good investment, but this data helps us to develop a more detailed insight into how graduates fare in the labour market. 

What does it tell us?

In many respects the actual findings are not a surprise. Students from high tariff institutions, that select students with high prior attainment (often from backgrounds with more social capital), tend to end up earning more than those with lower prior attainment. Historians don't earn as much as economists and creative arts students aren't in it for the love of money, but they are developing sustained careers out of being self-employed that compare favourably with sector averages.

There are some wide variations between institutions in some subjects. Some might be due to variations within different 'subjects', for example architecture and planning or subjects allied to medicine. Similarly, graduates may end up in different industries or parts of the same sector. You can take a safe bet that the highest earning mathematics graduates will be working in financial services, as well as physics graduates. Similarly, law courses and the earnings of their students may range from those who are starting out in a career as a local solicitor though to those joining a 'magic circle' firm in central London.​

There is also the disparity in the earning outcomes between men and women, borne out in every subject bar English Studies. Even in the case of nursing graduates, predominantly women, men earn more than women. There may be caveats but this is yet another example of the gender pay gap, and it is worth bearing in mind that this data is 5 years from graduation so we are largely talking about graduates in their mid-20s. This release hasn't focused on differences in ethnicity, there are some challenges in the depth of the data, but is an important question that needs consideration.

How you interpret this data also depends on how you define 'good'.

Some institutions have courses with median earnings below £20,000. This can be affected by cohort size but other factors are also at play. Students are likely to be the first to go to university and working locally in low earning labour markets where this wage and a first step on a career are good outcomes. If you consider this 'too low' the question, then, is why? Is it the graduate, the learning outcomes or is the labour market not making the best use of this graduates' skills? Any answer may be a combination of factors which should be addressed by universities working with employers.

There is also the question of what you want to use this data for.

It could help inform student decision making where students want to know what their earnings prospects are for different subjects and places of study. In some respects, this type of subject level data could make a subject level TEF less important. For government, especially for the treasury, this type of data could be used alongside loan repayment data guide future regulatory or policy interventions particularly around costs and funding. For universities, it could serve to guide for decisions about course portfolios or course design and delivery, particularly if students incorporate this data into their decisions.

In each of these cases just relying on earnings to define success and to guide decisions will result in bad outcomes. What this data highlights are the range of stories that can be told about graduates who have gone on to make careers in a labour market. We know many graduates want a 'good job' but this does not just equate to earnings and the same goes for the macro economic impact of graduates. Combining with more feedback from graduates about their experience in the labour market, as the new DLHE will do, will help to unlock the answer to some of these questions. The challenge for the sector is to understand these stories and help students assess their options and make their choices.

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