For much of the 20th century, the public story of higher education was built around knowledge. University was a place where young people encountered disciplines, books, laboratories and ideas that enlarged their intellectual world. Of course, degrees also helped people get jobs, and university friendships often became lifelong networks. But the moral centre of the institution was knowledge.

That centre of gravity appears to be shifting.

In a 2026 survey I conducted, with 265 valid responses from undergraduates at a Russell Group university, I asked respondents to divide the value of higher education into three components:

• Knowledge value refers to learning for curiosity, intellectual formation and disciplinary understanding.
• Signal value refers to the degree as a credential for employment.
• Social value refers to networks, friendships, contacts and belonging.

The students, on average, attributed 21.5 per cent of the value of higher education to knowledge value and��only 15.8 per cent to social value. Nearly two-thirds (62.7 per cent) of its value is accounted for by signal value.

But the survey also asked them to report the views of their parents – mostly from Gen X, around 30 years their senior on average. And the contrast was striking: the split between knowledge and signal value was almost reversed. Knowledge value accounted for 57.3 per cent of higher education’s total value, with signal value making up 33.8 per cent, and social value��only 8.9 per cent.

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Evolving value composition of higher education

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These figures should not be overinterpreted as a representative measure of national opinion. But they capture something many universities already feel. The social component of the student experience has not disappeared; in fact, it is more important for the current generation (Gen Z). But for today’s students, university is less obviously a temple of knowledge and more visibly a launching pad for success in the labour market.

This is not simply because students have become more instrumental. It is because the environment around them has profoundly changed.

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The first force that has wrought the change is massification. When only a small elite attended university, the degree itself carried scarcity value. As participation expanded, it became more common but also harder to do without. This is the paradox of credentialism.

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The OECD that tertiary education is associated with better labour-market outcomes; across OECD countries, tertiary-educated 25- to 34-year-olds earn substantially more than peers with upper-secondary attainment on average. But the private calculus has changed. Students know that not all degrees carry the same labour-market return. UK evidence, for instance, shows that lifetime earnings returns vary sharply across graduate identity categories and disciplines.

The second force boosting signal value is cost. When higher education feels inexpensive, the pursuit of knowledge can be defended as a public and personal good. When students face tuition fees, living costs and debt, they naturally ask a sharper question: what will this degree do for me? Once education is priced like an investment, students evaluate it like one. Universities may dislike this vocabulary, but while government funding reforms created much of the market architecture, universities have reinforced it through their growing emphasis on employability, graduate earnings and institutional competition.

In the UK, Scotland may buck the trend somewhat by keeping its universities free to access for Scottish-domiciled students – but not so for those from elsewhere in the UK or beyond, who account for of students at the University of Edinburgh, for instance. And in Scotland, too, the cost of living has risen significantly in recent years.

The third force driving the change in universities’ value perception is labour-market uncertainty. Students are graduating into an economy shaped by automation, , artificial intelligence and organisational volatility. Employers increasingly demand analytical thinking, adaptability, resilience and leadership skills, not just disciplinary knowledge. The World Economic Forum’s identifies analytical thinking as the top core skill for employers, followed by resilience, flexibility and leadership/social influence. In such a world, students may still value knowledge, but they ask whether it can be translated into employability, confidence and mobility.

The fourth force is technology. For previous generations, universities enjoyed a near-monopoly over advanced knowledge. The lecture theatre, the library and the academic textbook were the main gateways to serious learning. Now knowledge is more abundant, searchable and personalised owing to��the emergence of search engines, online courses, podcasts, open-access materials, YouTube lectures, professional forums and now generative AI. A motivated student can learn coding, statistics, finance, design or philosophy from multiple sources outside the formal university.

This does not mean that universities no longer matter as knowledge-transmitting institutions. Quite the opposite: in an age of excessive information, their role in structuring, validating and deepening knowledge may be more important than ever. But students increasingly distinguish between knowledge itself and the university degree. If knowledge can be accessed elsewhere, the distinctive value of university is more likely to be perceived in what cannot be downloaded so easily: recognised credentials, guided intellectual formation, trusted assessment, peer networks and access to opportunity.

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A book I co-wrote in 2024, (chapter 8), notes that in human capital theory, education raises productivity by giving people skills and knowledge. In signalling theory, education helps employers identify ability, persistence and social fit. Universities have always done both. The mistake is to pretend that one is noble and the other is vulgar. Knowledge without signal may become privately enriching but socially inaccessible. Signal without knowledge becomes empty credentialism.

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The answer to student instrumentalism, then, is not to scold students for caring about jobs. First, we must show why knowledge – deeply understood, not merely retrieved – remains the foundation of long-term adaptability. In an AI world, it is tempting to dismiss subject expertise as a commodity that machines can replicate. But that confuses information with understanding.

A well-formed mind is not a warehouse of facts; it is shaped through the slow, demanding work of mastering a discipline’s ways of thinking, learning when its models hold and when they break, and exercising judgement in the face of complexity. AI can surface answers; it cannot form the intellectual character that knows which question is worth asking. And while a narrow credential may help with the first job, a well-formed mind helps with the fifth job, the career change, the ethical dilemma, the technological shock and the leadership decision.

However, if students now see signal value as central, then career relevance must be built into the academic core, rather than outsourced to a careers office. This does not mean turning every degree into vocational training. It means making the intellectual value of each discipline legible to the labour market. Economics teaches causal reasoning, incentives and trade-offs. History teaches evidence, context and interpretation. Philosophy teaches conceptual clarity and argument. Literature teaches language, judgement and empathy. These are not “soft” benefits. They are forms of disciplined intelligence. But universities need to show students how such intelligence travels beyond the classroom.

Assessment should move beyond the closed essay and unseen examination as the dominant currency of achievement. These formats still matter, but they are no longer sufficient. Students need opportunities to produce work that demonstrates knowledge in public-facing, professional and collaborative forms: policy briefs, data analysis, consultancy-style reports, research summaries, digital portfolios, simulations, presentations and reflective projects. The degree signal becomes stronger when it points to visible evidence of capability.

Universities should take the social value of higher education more seriously, too – especially given its rising importance to students. Research on the transition from higher education to work shows that social networks play a key role, but their effects vary across groups and contexts. It is tempting to assume that networks are merely a by-product of campus life, but that product is distributed unfairly and unequally.

Students from more advantaged backgrounds often arrive with stronger social capital already in place. Those that do not – especially those whose personality types do not make them natural networkers – need structured access to mentors, alumni, internships, placements and professional communities. If universities ignore this, they leave social value to family background and chance.

Finally, policymakers should be careful not to reduce higher education to short-term earnings data. Labour-market outcomes are important, especially when students and taxpayers bear large costs. But if universities are judged only by immediate salary returns, they will be pushed towards a thin model of value. The social sciences, humanities and creative disciplines often generate forms of civic, cultural and organisational value that are harder to price but easy to damage.

The right question is not whether degrees produce earnings. It is whether higher education produces knowledge, capability, opportunity and social contribution in a changing economy. And that does not require universities to surrender to a purely transactional model of education. But it does require them to be honest about credentials and intentional about networks.

Students are not wrong to ask what university is worth. It is up to universities to give a better answer.

is professor of economics and director of Cardiff Confucius Institute at Cardiff University.��

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