A university education might expand your mind. It will also fatten your wallet. Data from the OECD, a club of rich countries, show that graduates can expect far greater lifetime earnings than those without a degree.
The size of this premium varies. It is greatest in Ireland, which has a high GDP per head and rising inequality. Since 2000 the unemployment rate for under-35s has swelled to 8% for those with degrees – but to more than 20% for those without, and nearly 40% for secondary school drop-outs. The country’s wealth now goes disproportionately to workers with letters after their names.
Low income taxes help. Irish graduates keep most of their earnings, as do Americans. Students in the United States also reap hefty returns due to a shortage of skilled labour (chart, below). Demand is substantial: the use of maths in the workplace is 10% greater than the OECD average. The supply is limited, since Americans are not particularly numerate. College graduates stand to gain.
Students in former Eastern Bloc countries also benefit from scarcity in the labour market, thanks to a historical lack of tertiary education. On average, one in four 55-year-olds in an OECD nation has a degree. In Poland, Slovakia, Slovenia and the Czech Republic it is closer to one in seven. But the university gates have opened wide: the proportion of Poles aged 25-34 with a degree tripled between 2000 and 2012.
Freshmen in Benelux and Nordic countries have less to celebrate. Getting a degree in these countries takes a long time, and therefore means missing out on more wages. The general population is well-educated and taxes are high. The boost in earnings for a Norwegian graduate is half as big as for a Czech, and he will pay 50% more into the government’s coffers.