Earnings should not dictate policy on creative subjects

The economist and former adviser to the Department of Education, Tim Leunig, argues that students of creative subjects are surplus to the requirements of both the sector and the economy, and cost the taxpayer money. But how much do we really know about how much creative graduates earn? And are their earnings related to what they studied, or where they work?

While Leunig’s post has sparked controversy, it is just the latest in a series of comments by people in government – and those adjacent to them – about the economic disadvantage faced by creative graduates. 

This economic argument is then used as justification to cut arts and humanities courses, framed either as saving government money to fund these degree programmes or as saving students from enrolling on “dead-end courses that leave young people with nothing but debt” (according to Gavin Williamson, former Education Secretary). 

Of course, there are many benefits to creative education beyond an individual graduate’s earnings. Even in economic terms, Leunig’s calculation ignores the wider benefits of the cultural and creative industries’ contribution to the economy. Perhaps more important, there are serious questions about the extent to which estimates of creative graduates’ earnings are a solid foundation to make policy decisions about creative education degrees.

Significant drawbacks in the data

The figures Leunig quotes are derived from analysis of the Longitudinal Educational Outcomes (LEO) dataset, an innovative linkage of education and earnings data from tax records. There are acknowledged drawbacks to this data. At the time of analysis, it only provided a short-term measure of earnings (up to the age of 30), and only included earnings from sustained employment. 

It will be no news to readers of Arts Professional that much creative work is short term and often involves unpaid internships and profit shares in early career stages. Core creative workers (that is, creative workers not including IT, marketing and advertising staff) are twice as likely as others to be holding two jobs. We don’t know what the impact of this precarity and complexity on the calculation of these earnings estimates might be. 

The estimates also do not take into account income from self-employment – although this is available in LEO, it doesn't cover as long a period as PAYE records. The Institute for Fiscal Studies, which authored the report on earnings by degree subject, checked that excluding this income didn’t affect their estimates of earnings. 

But analysis shows that while 14% of all people in work are self-employed, this rises to 57% of core creative workers, and an astonishing 88% of music, performing and visual arts occupations. Again, this is acknowledged by analysts as potentially impacting the estimates of earnings, but this doesn’t reach the headlines.

The issue is not employability

The biggest problem with these estimates is that they attribute low earnings to education subject choice rather than employment destinations. Creative graduates’ employment rates are not lower than the average for other graduates, so the issue is not with employability. 

Are their low earnings due to unpaid/low-paid/precarious work in creative industries? Are they due to going in to teaching, as many do, as well as other socially valuable but relatively low-paid graduate destinations? Or are low earnings due to low-paid non-graduate employment? The LEO dataset has not previously offered information about which sectors graduates are working in, and each of these situations would have very different policy implications. 

A new version of the LEO dataset has recently been released, which includes further years of records for both PAYE and self-employment earnings and, crucially, information on the industry of employment. I have access to this updated dataset and will soon begin work to start answering some of these questions. Which industries do creative graduates go into, and how much do they earn if they do? How large are the gender/race/class pay gaps? And do these persist even after controlling for the prestige of the university they attended? 

I will also be looking at who works in the cultural and creative industries, according to their educational background, to understand the extent to which the social networks gained at prestigious educational institutions compare to professionally-relevant training undertaken elsewhere in gaining professional advantage in creative industries. 

Likely to exacerbate exclusion on the basis of class

It should be acknowledged that the LEO dataset is not the only source that suggests creative graduates have lower earnings compared to other subject choices, and we should not be blasé about this. There must be concerns about the effectiveness of cutting creative degree places. 

Creative students are among the least likely to cite good career prospects as an important motivation for the subject choice, and most likely to say they had started to think about what subject they wanted to study at university or college before starting their GCSEs, so there is no reason to think that students will divert to more lucrative subjects. 

Moreover, there is an equalities issue, with more advantaged pupils likely to start thinking about their subject choices earlier and less advantaged pupils more concerned about their career prospects post degree. It would seem likely that reducing places citing poor earnings will exacerbate the classed exclusions from creative employment discussed in Culture is bad for you. 

Creative students may not be motivated by financial outcomes, but creative graduates deserve to have their work remunerated as well as those of other subjects. While we might consider that policymakers should adopt a broader conception of the value of creative education, creative economy organisations have a responsibility to ensure that pay and employment conditions in the sector support all, including those that do not have parental resources to support them.

Dr Orian Brook is Chancellor’s Fellow in Social Policy at The University of Edinburgh.
 sps.ed.ac.uk/staff/orian-brook
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