A university education in Hong Kong still just about pays
All is not lost for today’s degree holders despite another survey finding their earnings are falling compared to graduates in the past as well as school leavers
Tell us something we didn’t know. Another survey, this one by New Century Forum, finds that the earnings of today’s new university degree holders are falling, not only relative to their cohorts born since 1967, but those of secondary school graduates.
Such surveys are not only redundant, but misleading.
The survey studied new graduates who were born in six successive periods: 1967-1971; 1972-1976; 1977-1981; 1982-1986; 1987-1991; and 1992-1996.
In 1996, a university graduate earned an average of HK$19,255 a month. Today, it’s HK$17,475. Millennials with a university degree earn just 3 per cent more than those with only a secondary school diploma. In 1967-1971, a university graduate earned 30 per cent more.
Meanwhile, the entry jobs of university graduates pay less and less over each period, but the good news is that it stopped dropping in the last one.
More depressing, though, is that the entry-level jobs of almost 45 per cent of today’s university graduates are low-skilled or labour-intensive rather than knowledge-based, compared to just 33 per cent in 1996.
Such surveys are demoralising for young people. Their numbers are inevitable for several reasons, but they also paint an incomplete picture.
The pay levels of low-skilled jobs have barely changed since Hong Kong’s return to Chinese sovereignty in 1997; some may even have declined factoring in inflation. And of course, more of our graduates are getting those jobs.
In the past, only the most elite students went to just three universities up to the 1990s. Now, we have 10 universities accepting about 20 per cent of secondary school graduates.
Such surveys tend to focus on the earnings of new graduates. In the past, their pay could be spectacular. Perhaps many developing countries are like that because a university education is for the elite. That’s no longer the case with us.
Any social scientist in a developed economy, where there are far more university places, would tell you that to judge the earnings potential of an education, you need a longitudinal study over a lifetime.
The latest numbers from the US Bureau of Labour Statistics show that in America, university graduates earn about two-thirds more than those with only a high school diploma. That translates to about US$1 million more over a lifetime. The numbers may differ, but the phenomenon should hold for Hong Kong as well.
Considered in this light, a university education is still worth it. But we need local longitudinal studies to demonstrate that.