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Exclusive: level 2 qualification can add 12% to students’ earnings, study finds

Far from offering no real long-term benefit, as the Wolf report suggested, low-level courses significantly boost income for those who complete them, new research shows

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All types of low-level qualifications bring significant economic benefits to learners, according to landmark new research that raises significant questions about the government’s narrow focus on apprenticeships.

The study, which for the first time uses official data spanning more than a decade to accurately link learners’ qualifications with their subsequent earnings, suggests that non-­apprenticeship qualifications at level 2 and below bring far greater rewards than had previously been thought.
The research, shared exclusively with TES, also concludes that learners from the most disadvantaged backgrounds have the most to gain from lower-level programmes.

The study, led by Peter Urwin, professor of applied economics at the University of Westminster, calls into question some of the conclusions in the influential 2011 government-commissioned report by Baroness Wolf, which argues that “many low-level ­vocational qualifications…do not bring their holders any apparent income gains whatsoever”.

Last year, former education secretary Michael Gove hit out at the “scandal” of GCSE-equivalent qualifications, which he said were “not rigorous in content, accreditation or assessment”.

But Professor Urwin told TES that the new research, carried out with colleagues from his university and the Fischer Family Trust, reveals that both apprenticeships and other kinds of ­provision result in a significant earnings boost for learners.

Lynne Sedgmore, executive director of the 157 Group of ­colleges, which commissioned the study, said the findings ­demonstrated that “FE does actually make a significant contribution to the most disadvantaged”.

Mapping the progress of millions

For the first time, the researchers have linked data on qualifications from the Department for Business, Innovation and Skills (Bis) with earnings, employment and benefits figures from HM Revenue and Customs and the Department for Work and Pensions, to map the progression of millions of learners across the country over the past decade. The analysis for the 157 Group builds on wider research for Bis being carried out by Professor Urwin’s team.

The researchers estimated that, among the most disadvantaged third of learners, those who completed a level 2 course went on to earn 12 per cent more than their peers from a similar socio-economic background. The equivalent figure for level 2 apprenticeships was 10 per cent.

Professor Urwin said there was compelling evidence that ­earlier research, based on more limited data, had “under­estimated the returns from FE learning at level 2 and below”.

“Previous studies identified a negligible impact from NVQ level 2 qualifications, whereas our work with FE administrative data shows that learners secure a 10 per cent earnings gain,” he said.

“Also, we find returns are even higher for learners from deprived backgrounds, who are particularly concentrated in FE. Many involved in vocational learning are pleased that there is a push to expand the apprenticeship programme, but the assumption since the Wolf report has been that learning below level 3, especially NVQs, didn’t give good returns and was therefore of poor quality. This research shows we need to take a second look at this.”

Dr Sedgmore said the research “tells us what people in FE have always known: that FE does actually make a significant contribution to the most disadvantaged”.

“To generate policy that doesn’t take account of that reality, I think, will bring about unintended consequences,” she added. “We’re expanding on Alison Wolf’s work, and making observations that reposition policy thinking around level 2. I hope it proves to be a seminal piece of research.”
Baroness Wolf, the Sir Roy Griffiths professor of public sector management at King’s College London, told TES that she ­welcomed Professor Urwin’s research.

“It beggars belief to think that all low-level qualifications are really pointless, and that what a university teaches you is the only thing of any value,” she said.

“My concern was that people were taking qualifications simply to hit government targets, and not learning anything new. If we are now finally getting some concrete proof that shows low-level qualifications do bring some benefits, then that’s a good thing, and not before time.”

'It's useful to have external validation'

Stella Mbubaegbu, pictured above, principal of Highbury College in Portsmouth, welcomed Professor Urwin’s research. “It’s useful to have external validation of what we are doing,” she said. “We are not just offering qualifications for qualifications’ sake; those days are long, long gone. Across the country, FE colleges are offering the qualifications that are needed in our particular locality."

She added: “In Portsmouth, we are a major provider of apprenticeships, but that’s most certainly not suitable for every single individual or every single business. Not every career allows you to jump from GCSE to a level 3 or 4 qualification. If you work in a craft, technical or professional area, you need to have ladders of progression; lower-level qualifications exist for good reasons.”

A Bis spokesperson said: “We welcome the analysis by Peter Urwin. The research highlights the importance of low-level qualifications to improving learners’ life chances, social mobility and productivity for the wider economy.”

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