Levels of Success looks at the earning potential of apprenticeships versus degrees, finding that the very best apprenticeships (at level 5) result in greater lifetime earnings than degrees from non-Russell Group universities. But, significant reform of the system is needed. There are not enough of these best apprenticeships, with most being at level 2 (GCSE) and level 3 (A-level) standard.
The earning potential of the best apprenticeships rivals degrees…
- Higher apprenticeships at level 5 result in greater lifetime earnings than undergraduate degrees from non-Russell Group universities, according to the latest modelling by the Boston Consulting Group.
- Across a lifetime, someone with a higher (level 5) apprenticeship averages earnings of around £1.5m, while someone with a degree from a non-Russell Group university earns just under £1.4m on average (when student debt repayments are considered).
- The earning potential of an advanced apprenticeship at level 3 is slightly better than that of someone whose highest qualification is at A-level.
But, there remain several shortcomings in the apprenticeship sector…
- Currently, the majority of apprenticeships are intermediate (level 2), many of which offer little value for the apprentice and only marginally better lifetime earnings than secondary school qualifications alone.
- Research by Oliver Wyman suggests that the most elite apprenticeships are disproportionately populated by those from wealthier backgrounds. They are also more likely to have been given specialist preparation by their school.
- There is a sharp gender divide in apprenticeships. For example, engineering apprenticeships remain male-dominated (96% are men); beauty therapy apprenticeships female-dominated (99% are women). It has recently been reported that, because of this imbalance, female apprentices earn over £1 less an hour than male.
- According to the latest data for 2014/15, less than a third (32%) of apprenticeship starts have been by those under 19, but over a third (36%) by those aged 25 or older. This limits the potential of apprenticeships as a vehicle of social mobility.
- The perceived lesser value of apprenticeships compared to degrees appears to be an ingrained part of UK culture, as ComRes polling and Oliver Wyman research for this report suggests.
Other countries, particularly Germany, Austria and Switzerland, have more effective apprenticeship programmes, in terms of both the quantity and quality of provision, and offer excellent examples of best practice.
- Government, employers and other providers should work together to provide more advanced and higher apprenticeships.
- Level 3 should become the norm for young people through automatic progression from level 2.
- The Careers and Enterprise Company should promote apprenticeships further.
- The government should launch a bigger apprenticeships awareness campaign.
- Gender and socio-economic inequalities within the apprenticeship sector need to be reduced.
- The government should reform and simplify the vocational qualification system.