The Regulatory Policy Committee (RPC) exists to ensure that regulation promotes growth, is properly evidence-based, and does not harm investment or international competitiveness.
A regulatory environment that supports investment in human capital - people's education and skills - is just as important as one that supports physical capital. As the Education Secretary put it, skills are "the cornerstone of our plans to get growth moving in every community."
But the economic returns to education unfold slowly, vary enormously and can be harder to pin down than for bricks-and-mortar investments.
This is the third blog in our series on how the government values important societal outcomes, following earlier pieces on health and carbon.
The UK can claim to be genuinely world-leading in education economics, and the stakes in this analysis are high for effective policy analysis.
Breakthroughs using “big data”Until a few years ago, most estimates of education's value relied on sample surveys. Then came LEO - the Longitudinal Education Outcomes dataset. Developed by the Department for Education (DfE), it links education and employment records for 38 million people in England.
LEO has been transformational in exploring the pathways within and after education, and how it shapes our life chances. It offers granular detail to explore different aspects of how lifetime earnings are associated with subjects studied, schools and colleges attended, grades attained and location.
From pre-school to pay packetsUsing LEO, the government has invested in economic research across the entire education system. Some highlights:
UniversityThe Institute for Fiscal Studies (IFS) reported a £110,000 lifetime return for undergraduate degrees, varying significantly by subject, institution and student background (IFS, 2020).
Secondary schoolA one-grade improvement in GCSEs was associated with an increase in lifetime earnings of £8,500, again varying by subject with the highest returns to Maths, £14,500 (DfE, 2021).
Primary schoolAn improvement of one standard deviation - a statistical measure of the spread of pupils' results around the average - in total Key Stage 2 English and maths attainment is associated with an increase in lifetime earnings of £63,700 (DfE, 2025a).
AttendanceOn average, missing one day of secondary school is associated with £750 in lower lifetime earnings (DfE, 2025b). The Secretary of State for Education used this research when stating that recent improvements in school attendance could unlock over £2 billion in future productivity (DfE, 2025c).
DfE has also developed valuation approaches for further education and early years provision.
What wages missWage slips clearly don't tell the whole story when it comes to the value of education.
For individuals, education is linked to better health, civic engagement, and life satisfaction. At a national level, it determines long-term GDP growth and future economic prospects (Hanushek and Woessmann, 2020). For society, education reduces crime and strengthens social cohesion (IFS, 2013).
So, microeconomic estimates of lifetime earnings are considered to be the most reliable way to monetise the value of education for policy analysis, but the societal value of education stretches far beyond wages.
Using yesterday's data for tomorrow's policyThere is one final note of caution.
These valuations are based on historic data. But today's students will be working in the 2030s, 2040s and beyond - in labour markets reshaped by AI and other technological and cultural shifts that we cannot predict. The skills that commanded a premium in the past may not be the ones we need in the future.
The best that any economist or policy maker can do is use evidence as a guide to the value of education, with appropriate humility about what we don’t know.
The evidence exists, let’s use it wellTo grow the economy, the regulatory environment needs to support investments in human capital, just as much as it does physical capital. The UK government has built genuinely world-leading data and research on the economic returns to education and skills.
The RPC's recommendation is simple: departments should draw on this as well as all the other available evidence, wherever their policies affect educational outcomes. The toolkit exists. The more it's used, the better our regulatory decisions will be.
The RPC would like to thank officials in the Department for Education for their input in developing this blog post.
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seen at 10:31, 16 March in Regulatory Policy Committee.