Individual Choice and Risk: The Case of Higher Education

Abstract

The expansion of higher education raises the risk environment for school-leavers as more occupations become partially graduate with the result that occupational signals are fuzzy. This makes the educational decision more difficult and more risky, especially with more of the cost of higher education being transferred to the individual. After a discussion of the nature of risk, derived from Beck, and of the role of government policy and of economics in obscuring this, the analysis uses simple quantitative techniques, based on British Labour Force Survey data, to demonstrate the increased fuzziness of graduate work. It is also shown that a rising proportion of graduates receive only average pay, thus raising the risks associated with educational investments even further.