UK graduates with a first or 2:1 degree earn more
UK graduates with a first or upper-second class degree earn more money than their peers, a new study has found.
Researchers from HESA (the Higher Education Statistic Agency) and the Department of Economics at Warwick University compared the pay of graduates with non-graduates.
The research noted that the decline in ‘graduate premium’ was less pronounced for graduates with higher grade degrees.
The study found that graduates born in 1970 who had earnt a first or upper-second class degree earned 20% more than non-graduates at age 26.
This was also much higher than the graduate premium of 14% for those with a lower second class or lower degree grades.
Graduates born in 1990 with a first or 2:1 earn 14% more than non-graduates
The same comparison was made for people born in 1990, and it was found that graduates with a first or 2:1 degree earned 14% more than non-graduates at age 26.
However, the difference in income between non-graduates and those possessing a 2:2 or lower class degree was only 3%.
The overall reduction in the return which a degree brought with it could largely be attributed to a stronger growth in pay for non-professional occupations, than has been witnessed in professional jobs.
Furthermore, the increase in the income gap between those possessing higher and lower degree classifications may suggest that workplace recruiters are prioritising graduates with at least an upper second class degree.
The ‘graduate premium’ has reduced over time
In a previous study, these co-researchers had found that the graduate premium has reduced over time.
The study revealed that UK graduates born in 1990 earned 11% more than non-graduates at age 26, compared to the 19% graduate premium which graduates who were born in 1970 earned.
Further research beyond the findings of this study sought to determine whether these findings represented a short-term dip or the beginning of a more general decline.
Tej Nathwani, econometrician at HESA, responded to this study with a comment on the importance of such studies for prospective higher education students.
“This study adds to the available information about the financial benefits that individual students can expect from a degree. We hope to explore this area further in forthcoming years, as new data is released into the public domain.”
Josephine Walbank is a reporter for Global Education Times (GET News) with a focus on education in the UK, Asia-Pacific, and Americas, and student experience and lifestyle news.
Josephine is an experienced journalist who previously served as the Editor-in-Chief of The Falmouth Anchor. She is also the former Deputy Editor of Voices, the Falmouth & Exeter Students’ Union’s publication, and has written for various food and lifestyle publications.
You can reach her at firstname.lastname@example.org