This system not only gives a huge advantage to the people who are most likely to become high earners, but a particular advantage to the men who become high earners. Across all subjects, the government’s study (conducted by the Institute for Fiscal Studies) found that the pre-tax discounted benefit of going to university was ?260,000 for women, and ?430,000 for men.

In this irrational market, women who want to invest in a university education are asked to believe despite centuries of evidence to the contrary that things will quickly change, and they will earn as much as men over their lifetimes.

In the 1970s, workers were given defined-benefit pensions because it was assumed that in the future (long after the people setting up the schemes had retired, on their own cushy pensions), growth would continue and an ever-expanding economy would keep passing the www.guaranteedinstallmentloans.com/payday-loans-nj/ wealth on. By 2018, the reality was a ?190bn hole in the nation’s pension schemes, and an economy in which the young pay for today’s elderly in the knowledge that there will be no such bounty for their own retirement.

Worse still, the irrational degree market is underwritten by people who don’t necessarily take any direct benefit from it: taxpayers, who cover student debt at the cost of more than ?7bn a year.

For any government, addressing the supply of (financially) worthless degrees is tricky. Even if it means a big chunk of the population escapes long-term reduced earnings and debt, no politician would want to be seen as having reimposed the old system of class division and low social mobility, in which only a privileged few went to university.

It might look unfair or unproductive if doctors are saddled with more debt than sociologists. But inequality is bad for GDP; as far as the wider economy is concerned, there’s a lot to be said for giving the graduates likely to end up on lower incomes more spending power in later life, and giving the taxpayer less sub-prime student debt to support (economists being more likely to pay off their student loans that poets).Continue reading→