Irish degree gives you more value for money than any other

steddyeddy

The Economist reports that an Irish degree is the best value in the world. I don't find a lot wrong with this. I think we're very lucky in that we get a relatively cheap education and get a degree that will take us anywhere. Article from the Irish Times and the original piece from the Economist.

Amid plummeting university rankings, reduced funding and constrained employment prospects, the Economist has come out with a figure that might still convince of the merits of a college education: the net benefit of having a university degree in Ireland is far greater than any other OECD country.
Yes, using Organisation for Economic Co-operation and Development figures, the Economist shows that the lifetime net benefit of getting a degree in Ireland – compared to not getting one – is some $350,000 (€328,000).
This means that someone can expect to earn a net, ie after tax, income of some $350,000 more over their lifetime than someone who does not have a degree.
This is far in excess of the $80,000 or so benefit to the Swedes of having a degree, and more even than the $300,000 benefit in the United States.
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Price levels
In the UK the benefit is of the order of about $230,000, and is less than $200,000 in both Germany and France. The figure is derived using purchasing power parity figures, rather than market exchange rates, which aim to eliminate the differences in price levels between the various country comparisons.
While it acknowledges the high ongoing rates of youth unemployment in Ireland – figures for November 2016, for example, show that the unemployment rate for people aged 15-24 years was 15.5 per cent, compared with 7.3 per cent overall – the Economist also makes a distinction.
It finds that the unemployment rate for those with degrees is 8 per cent, but it swells to more than 20 per cent for those without a degree, and to nearly 40 per cent for secondary school drop-outs.
Graduates
Part of the reason why Irish graduates benefit so strongly from their degrees are low income taxes, the Economist says, noting that “Irish graduates keep most of their earnings, as do Americans”.

But, while graduates might be heartened to read that there is significant value in their degree, it surely must also raise the question as to why there is such a large discrepancy in earnings between those who have a degree in Ireland, and those who don’t.
As the magazine finds, “The country’s wealth now goes disproportionately to workers with letters after their names”.

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steddyeddy

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Yea I'm with you there. I don't consider them low per say.

D9Male

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Yes, they are relatively low, unless you are well paid.

At the lrish minimum wage, we pay an extremely low rate of tax. 4.88% compared to 12.33% in the UK, 17.24% in Sweden and 27.03% in Germany.

At the average Irish wage (around €36k, we pay a relatively low rate of tax. 21.62%, compared to 22.1% in the UK, 22.74% in Sweden and way higher in Germany, Netherlands, Spain etc.

It is only Irish high earners that pay relatively more tax than their foreign counterparts.

Source KPMG.

http://www.taxinstitute.ie/Portals/0/Effective%20Income%20Tax%20Rates%20Ireland%20v%207%20competitor%20countries.pdf

endacl

D9Male wrote: »

Yes, they are relatively low, unless you are well paid.

At the lrish minimum wage, we pay an extremely low rate of tax. 4.88% compared to 12.33% in the UK, 17.24% in Sweden and 27.03% in Germany.

At the average Irish wage (around €36k, we pay a relatively low rate of tax. 21.62%, compared to 22.1% in the UK, 22.74% in Sweden and way higher in Germany, Netherlands, Spain etc.

It is only Irish high earners that pay relatively more tax than their foreign counterparts.

Source KPMG.

http://www.taxinstitute.ie/Portals/0/Effective%20Income%20Tax%20Rates%20Ireland%20v%207%20competitor%20countries.pdf

What? Competitively wealthy earners pay comparatively more? Somebody should tell Paul Murphy!

D9Male

Middle and high end earners don't pay a ridiculous amount of tax compared to other countries, but it is marginally on the high end.

The real striking statistic is how little tax is paid by people earning €18k to €35k. That should be communicated to Paul Murphy alright.

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endacl

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But isnt the point that you would expect a degree holder to be a higher earner and not on minimum wage?

Depends on the degree and opportunities relating to it.

D9Male

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Absolutely, that should be the idea.

However, the average salary for a university graduate is under €30k, according to GradIreland. Someone earning this amount will still pay lower taxes for a number of years than their equivalents in other countries.

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D9Male

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Good point - I would still say that the relatively lower tax regime here means that graduates will benefit a fair bit relative to most European countries. But not compared to the UK.

My motive for putting the figures up was more to disabuse the notion that we have a high income tax economy here. We do, but only for very high earners.

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D9Male

Plucking a figure out of the sky, but back in 2013 the top 5% of individuals in the income distribution have an income of more than €78,000 per annum.

So let's say €80k.

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D9Male

I don't really understand your question, but I will try to answer. The person earning 80k pays more on a relative and absolute basis.

Hector Bellend

I'm working on my third degree and am currently unemployed. This report is a big pile of steaming horse plop.

eeguy

Hector Bellend wrote: »

I'm working on my third degree and am currently unemployed. This report is a big pile of steaming horse plop.

Nope, your degrees are just in the wrong field, or your grades aren't good enough.

Although with a name like that, maybe employers think you're taking the p*ss

Hector Bellend

eeguy wrote: »

Nope, your degrees are just in the wrong field, or your grades aren't good enough.

Although with a name like that, maybe employers think you're taking the p*ss

I have a first in accountancy, now I was only made unemployed last week but thats beside the point

Yourself isit

D9Male wrote: »

Middle and high end earners don't pay a ridiculous amount of tax compared to other countries, but it is marginally on the high end.

The real striking statistic is how little tax is paid by people earning €18k to €35k. That should be communicated to Paul Murphy alright.

I think the stats are that a single tax payer will only double his take home going from gross 25k to about 80k.

Yourself isit

The 328k sounds great but divided by 40 years it's < 10k a year.

So it could well be low taxes, we would need to know the median salary for non college grads. Let's say it's 25k - that sounds reasonable. Then the college grads median is 35k so the grad isn't getting hit by the Higher rates. On average.

silverharp

Degrees arent what they used to be, back in the 70's or 80's less people went to college so it marked you out. Now "everyone" has a degree, in the UK all new Police will have have a degree in the next few years. If the state has to pay for it it wouldnt be a bad idea to have more vocational model where possible

Fr_Dougal

Hector Bellend wrote: »

I have a first in accountancy, now I was only made unemployed last week but thats beside the point

No it's not.