Download reportVarsity Blues · Bridgehead Education · 2014
Varsity Blues:
Time for Apprenticeships
to Graduate
Published in 2014, a landmark report that made the case for elevating apprenticeships to degree-equivalent status. With the UK trailing Switzerland, Germany and Austria by decades on participation, and England the only country in its comparison where Level 2 completers outnumbered those at other levels, this report called for the structural reform that would eventually become the Apprenticeship Levy and degree apprenticeship system.
Historical report, data reflects 2013/14 figures
510,000
Apprenticeship starts 2012/13, source figure (p.48)
74
£ returned to Exchequer per £1 invested in apprenticeships, vs £57 for an average degree (p.51)
28%
Of graduates earned less than the average apprentice over their lifetime (source p.25)
Lifetime earnings: graduates below average apprentice
Using BHPS Wave 12 and LFS data, the report built a four-factor model showing how the proportion of graduates earning less than the average apprentice grows once debt, foregone wages, and university type are factored in.
28%
Baseline, graduates earning less than average apprentice over their lifetime (source p.25)
39%
After debt, foregone wages & new university, nearly 2 in 5 graduates (source p.25)
46%
Vs higher-level apprentice proxy (NVQ L4–5): almost half of new-uni grads (source p.27)
Graduate earnings vs apprentices: lifecycle by age
Graduate earnings rise strongly in the first two decades of a career. But the report shows they then plateau and decline relative to apprentice wages. The earnings gap is at its narrowest around age 45, where 12% of Russell Group and 20% of 'new' university graduates still earn less than the average apprentice annual wage. By retirement, over half of all graduates fall below the apprentice average.
12%
Russell Group graduates still below avg apprentice wage at age 45, peak career (source p.28)
20%
'New' university graduates below avg apprentice wage at age 45, 1 in 5 (source p.28)
50%+
Graduates earning below avg apprentice wage at retirement, over half of all degree holders (source p.28)
Under-25 unemployment: apprentices vs graduates, 2005–2013
The financial crisis pushed under-25 unemployment to an 11% peak for both groups, but the timing and recovery diverged sharply. Apprentice unemployment peaked in 2009 then fell to just over 6% by 2012. Graduate unemployment peaked a year later in 2010 and failed to recover, returning to 11% in 2012 as double-dip recession fears mounted.
11%
Peak under-25 unemployment: apprentices in 2009 AND graduates in 2010, both hit 11% (source p.34)
6%
Apprentice under-25 unemployment in 2012, while graduates climbed back to 11% (source p.34)
7.5%
Apprentice unemployment in 2013, slight rise; graduates subsided but remained well above (source p.34)
Under-25 employment rates: apprentices vs graduates, 2005–2013
Using Labour Force Survey data, the report tracked under-25 employment rates for both groups through the financial crisis. Apprentices hit a low of 84.4% in 2010 but recovered to 90% by 2013, while graduates stalled at 84%, a six-point gap in apprentices' favour.
91% vs 88%
Employment in 2005: apprentices vs graduates under 25, confirmed source p.35
84.4%
Apprentice employment at 2010 low, both groups hit floor together (grad low: 83.8%)
90% vs 84%
Employment in 2013: apprentices recovered; graduates stalled, source p.35
Lifetime earnings by degree subject vs higher apprentice
Subject studied is the single biggest determinant of whether a graduate out-earns a higher apprentice. STEM subjects are largely protected; arts and media graduates from post-1992 universities fare worst, three in four earn less than the average NVQ L4–5 completer.
15%
Medicine, only 15% of medical grads from new universities earn less than higher apprentice
74%
Media & Info Studies, 3 in 4 earn less than the average NVQ L4–5 completer (source p.30)
52%
Business & Finance from 'new' universities, over half earn less than a higher apprentice (p.30)
Exchequer return: £ per £1 invested by qualification
The most striking finding of the taxpayer chapter: once the cost of investment is factored in, apprenticeships return £74 to the Exchequer for every £1 spent, versus just £57 for the average degree. Higher-level apprenticeships (NVQ L4–5) return £85. Only medicine and engineering degrees outperform apprenticeships on a per-pound basis.
£74:£1
Apprenticeship per-pound return to Exchequer, vs £57:£1 for average degree (source p.51)
£85:£1
NVQ L4–5 (higher apprenticeship proxy) per-pound return, best performing qualification (source p.51)
£51:£1
'New' university degree per-pound return, £6 below the average degree return of £57 (source p.52)
Employer attitudes to vocational qualifications
A 2013 Edge Foundation and City & Guilds survey of 1,000 businesses found strong employer demand for vocational pathways, yet a persistent sense that government and schools were failing to make the case. A slim majority even said vocational qualifications are more valuable than academic ones for the workplace.
83%
Of businesses said young people need more awareness of career options, Edge Foundation / City & Guilds 2013
60%
Felt the UK Government was not doing enough to support vocational education (source p.61)
53%
Agreed vocational qualifications are more valuable than academic ones at preparing people for work (source p.62)
International apprenticeship participation rates
The UK's 15% participation rate in 2014 placed it far behind Switzerland (70%), Germany (60%), and Austria (52%), countries where vocational training commands genuine parity of esteem. France at 24% still comfortably outpaced UK. Data from Chart 22 (LSE 2010, 2008/09 figures) referenced in source.
70%
Switzerland, 7 in 10 young people take a vocational path, world-leading model
60%
Germany, the Dual System remains the global benchmark for apprenticeships
15%
UK in 2014, one of the lowest participation rates among comparable economies
School leaver perceptions: what each path is associated with
ComRes surveyed 500 school leavers. On practical attributes, low debt (83%), useful skills (85%), and clear career path (66%), apprenticeships lead. But university dominates on social standing: 92% associate it with being 'well respected'; just 27% say the same of apprenticeships.
89% vs 15%
Associate 'practical learning', apprenticeship vs university. Apprentices win overwhelmingly (source p.64)
92% vs 27%
'Well respected', university vs apprenticeship. Social legitimacy gap remains stark (source p.64)
66% vs 53%
'Clear career path', apprenticeship vs university. The one dimension where apprentices lead (source p.64)
School leaver planning and social legitimacy
Despite the earnings evidence, university remains the overwhelming default. Only 6% planned an apprenticeship versus 73% university. 80% had received school guidance on university, fewer than half (46%) on apprenticeships. Social pressure is decisive: three in four say their parents and friends prefer university.
73% vs 6%
Plan university vs apprenticeship, ComRes poll of 500 school leavers (source p.62)
2%
Say majority of peers planning an apprenticeship, vs 78% for university (source p.62)
80% vs 46%
Received school guidance on university vs apprenticeships, structural careers gap (source p.62)
Key Findings
- ↗Under-25 apprentice unemployment fell to 6% in 2012 while graduate unemployment returned to 11%, a stark divergence after both groups peaked at 11% during the crisis.
- ↗28% of graduates earn less than the average apprentice over their lifetime, rising to 39% once debt, foregone wages, and new-university attendance are factored in.
- ↗74% of Media & Information Studies graduates from post-1992 universities earn less than the average higher apprentice completer.
- ↗Apprenticeships return £74 to the Exchequer per £1 invested, versus just £57 for the average degree. Only medicine and engineering degrees outperform apprenticeships on this measure.
- ↗Over half of all graduates earn less than the average apprentice annual wage by retirement, the lifetime earnings advantage fades as graduate pay plateaus after age 45.
- ↗National data show apprenticeship starts skewed heavily to Level 2 (GCSE-equivalent) at the time; the report found England the only country in its study where Level 2 completers outnumbered those at other levels.
- ↗The UK trailed Switzerland (70%), Germany (60%), and Austria (52%) on participation, countries where vocational training has genuine parity of esteem.
- ↗Despite the evidence, only 6% of school leavers planned an apprenticeship versus 73% planning university. 92% associated university with being 'well respected', only 27% said the same of apprenticeships.
This report pre-dates the Apprenticeship Levy (2017), the introduction of degree apprenticeships, and the Institute for Apprenticeships and Technical Education. Many of its recommendations were subsequently adopted as government policy.
