Future earnings are determined more by the subjects young people study than the college they study at, new research has revealed.

A report published today by the Centre for Vocational Education Research at the London School of Economics, Where versus What: college value-added and returns to field of study in further education, found that the subjects studied affect future earnings by more than twice as much as which further education college they studied at.

The researchers found that a student aged between 16 and 20 who went to a college in the top 15 per cent of colleges earned just 3 per cent more seven years later than a student from the same background with the same school grades who went to a college in the bottom 15 per cent of colleges. 

But studying engineering and manufacturing technology – at any college – boosted students’ earnings by 7 per cent, compared with those who specialised in retail or commercial enterprise. 

However, when it came to continuing on in education, the results were different. The study found that students from the top 15 per cent of colleges had a 10 per cent higher chance of going into higher education than those who were from the bottom 15 per cent of colleges. 

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The study's authors created their own value-added measures for FE colleges in England to estimate the impact of vocational education on young learners (aged 16-20) by looking at how students with the same socioeconomic background, quality of secondary school attended and prior attainment did in terms of earnings and employment on average around seven years after attending college.

They then used these value-added measures to rank colleges and assess the impact of going to a college with a low value-added score compared with one with a high value-added score.

Claudia Hupkau, assistant professor in the Department of Economics, CUNEF, Madrid, said that looking at earnings immediately after leaving college could give a “false impression” of the value of further education. 

She said: “Students in an FE college will typically specialise in one field of study – which takes up 50 per cent to 80 per cent of their time – and take additional courses. We found that immediately after leaving college, students taking many of these specialisations would earn less than before enrolling.

“But five years on, most specialisations see significant earnings increases, especially for young women. The fact that the timing of measurement of labour market outcomes matters has important policy implications for the evaluation of colleges in terms of the subsequent labour market performance of their students.”

The report also found that if a learner was moved from a college ranked in the bottom 15 per cent by value-added to one ranked in the top 15 per cent, they would, on average, achieve 6.5 per cent more learning hours, be 11 per cent more likely to achieve a level 3 qualification and be 10 per cent more likely to attend higher education.