Skill Acquisition during Higher Education

Whether a university degree provides the skills required by a rapidly changing labour market is a very open question. Technological advances are generating sweeping changes to traditional job tasks, with evidence of an increasing demand for, and increasing return to, a wide range of non-cognitive skills (Deming 2017, Edin et al. 2017). These concerns are not new, and for the past few years an important theme in the UK Higher Education sector has been the development of strategies to improve the ‘employability’ of graduates. This is perhaps best represented by efforts to encourage and recognize participation in extra-curricular activities, such as work placements, volunteering, or engagement in competitive sports. The rationale is that these activities may not only enhance students’ experience while at university but also empower them with a set of skills that employers increasingly value in the labour market, such as the ability to negotiate or to perform well in a team environment.

Yet, we still know very little about what students think about the value of these activities in terms of employability and earnings and whether there is significant variation in these beliefs according to students’ family background and other individual characteristics. In a recent study, we exploit new data collected from a cohort of undergraduate students at a UK Higher Education institution (the BOOST2018 study) to show how expected returns to investment in extra-curricular activities inform students’ time allocation choices during undergraduate studies (Delavande et al., 2020). Interestingly, we also uncover important differences in these expected returns by ethnicity, with BAME students perceiving lower returns to work experience and other types of extra-curricular activities as compared to their white British colleagues. It is however still unclear whether the differences we document are driven by the presence of labour market constraints, which may reduce access to certain types of activities for some groups of the population, or lack of information about the true return to these activities. Indeed, with few exceptions (Persico et al. 2004, Lechner and Downward 2017, Saniter and Siedler 2014), there is little proof that participation in extra-curricular activities while at university leads to improved employability upon graduation, or if the returns vary with socio-economic background or ethnicity, for example. It is also unclear to what extent students have a good understanding of the type of employability skills mostly sought after by prospective employer, or whether they these beliefs are updated upon entering the labour market.