Earnings Premium

The additional income associated with a qualification, skill or experience compared with not having it.

Example

A qualification that moves pay from 50,000 to 56,000 carries a 6,000 earnings premium.

Average premiums hide wide variation, and the premium you receive depends on how you use the skill.

Human Capital — The economic value of a person's skills, knowledge, health and experience, reflected in their capacity to earn over a working life.
Skill Depreciation — The decline in the economic value of a skill over time as tools, industries or demand change.

The return is the earnings difference, not the certificate — A self-investment pays off through higher earnings, better opportunities or more working years. Measure it as a difference over time, after tax, against what it cost. (11 min)
The real price includes the income you give up and the years the skill stays valuable — A self-investment's full cost is fees plus lost earnings plus time. Its value depends on how large the earnings difference is and how long it lasts before the skill ages. (12 min)
Appraising one opportunity: evidence of the outcome, not the promise of it — Before paying for a course, qualification or programme, look for evidence that people like you achieved the outcome you want, check completion and employer demand, and compare cheaper routes. (12 min)