In the past year, there has been a lot of focus on improving social inclusivity through better education system. Polytechnics are at the centre of this issue, with the Ministry of Education planning to consolidate their course offerings to help polytech students to better compete in the job market. To assess how effective polytechnic education currently is in improving students career prospects, we measure the return on investment of polytechnic diplomas by field of study, and compare them against alternative results like only finishing junior colleges or going to a university.
- Polytech diplomas do help people increase their income by 40% compared to those who only graduate secondary or junior college.
- Diplomas in nursing and IT had some of the lowest ROIs on tuition, while diplomas in science & business tended to yield lowest return on tuition, a trend we also observed in university degrees.
- Polytech diplomas yielded higher return on tuition than university degrees immediately upon graduation, but absolute performance was still much better for university graduates in terms of income and full-time employment rate.
Do Polytechnics Help Students Improve Their Income?
According to the statistics gathered by the Ministry of Manpower, a diploma from polytechnics have an undeniably positive impact on a person's income. For example, workers aged 15 years and over with a diploma & professional qualification made about 40% higher gross monthly income. Given that a polytechnic diploma costs around $6,000 to S$9,000 of tuition to acquire for a Singaporean citizen, this would mean that the diploma could pay for itself within the first 1-2 years of work.
Which Polytechnic Courses Have the Highest Return on Investment?
According to our calculation based on the polytechnic Graduate Employment Survey, we found that polytechnic courses pertaining to health sciences, informational & digital technologies and engineering tended to have the highest level of return on investment on their tuitions immediately upon graduation. In particular, a diploma in nursing and optometry stood out as having the two highest median gross monthly wages and employment rates. Also of note, a diploma in digital & precision engineering showed the 3rd highest return on tuition given that it had a 94.5% employment rate 6 months after graduation.
Which Polytechnic Courses Have the Lowest Return on Investment?
On the other end of the spectrum, we found that diplomas related to applied science tend to have the lowest ROI on tuition, adjusted for employment rate. In particular, studying biotechnology yielded the worst result with employment rate of 30.8% after 6 months of graduation and S$2,000 of median monthly starting salary. Business related diplomas also tended to do worse than average, with the lowest overall employment rate of 45.9%.
How Do Polytechnics Compare to Universities?
Surprisingly, this analysis uncovered a few interesting points of comparisons with our study of the university majors with the highest return on investment in 2017. First, it seems that nursing & IT related studies tend to yield the best results immediately after graduation for both university students and polytechnic students. Similarly, both types of educational institutions seemed to yield worse results for students of science and business.
Furthermore, we found that polytech diplomas tend to yield better return on tuition than university degrees immediately after graduation. For example, the average return on annual tuition was 3.8x for university degrees, compared to 5.4x for polytechnic diplomas. Considering that universities tend to take 1-2 years more than polytechs, the real difference may seem even higher. However, it is important to point out that university graduates tend to experience far better results in absolute terms, as shown below. Not only that, university grads also tend to have higher full-time permanent employment rates of 80% while polytech grads showed 56% full-time permanent employment rate 6 months after graduation.
Overall, these findings lead us to conclude that polytechs are still a decent option for those who may not be able to attend or afford a university education. Of course, one person's long term ROI on their degrees are heavily dependent on the individual's own abilities, efforts, success and luck. However, this measure of the short-term and immediate ROI is especially relevant for students who have taken study loans from a bank to fund their higher education or those who just need to maximise their income relative to their costs as soon as possible. Furthermore, while these measures of return on investment aren't absolute, they do capture what students or recent graduates can expect to make immediately after graduation compared to the cost of their degrees. For instance, all polytech degrees cost the same, but an optometry diploma can help one earn 50% higher salary than a science diploma.
Note on Methodology
By comparing the latest gross tuitions of polytechnic institutions to their employment statistics compiled by the Ministry of Education, we attempted to identify the best polytech courses with the highest return on investment on their tuitions. To calculate the ROI, we divided each course's median annual gross salary by 1 year of tuition. Then, we multiplied this figure by the overall employment rate to get to an "adjusted ROI" figure for each concentration of study. Such calculation is meant to reflect the realities of an average student at a polytechnic institution.
Admittedly, this methodology is not perfect. For instance, it may be unfair to compare the latest tuition figures to the salary of the latest graduating class. Also, we used the tuition for a Singaporean citizen, though the rankings were the same when using tuitions for permanent residents and international students. Not only that, wages can change in the future for different industries, and therefore can alter the long-term ROI of each concentration. Lastly, certain jobs tend to have a lot more stable stream of income for a long period of time (i.e. nurses), while others with high level income (i.e. finance) may not have the same level of safety. However, we wanted to estimate the most current measure of ROI, and hence decided on the calculation methodology explained above.
For interested readers, we have compiled the following table displaying the detailed data set that we used to compile this study.
This was first published at Value Penguin's website, "Paying for a Polytechnic Diploma in Singapore: Is It Worth Your Money?".