Yahoo Finance How your university course and grade determines your pay
Access to "elite jobs" in the UK is governed by what you study, which university you study and your degree class, a new study suggests.
According to analysis from the Institute for Fiscal Studies (IFS) higher degree classes are associated with substantially higher earnings.
On average, the premium for gaining a first class degree over an upper second (2.1) is 4% for women and 7% for men.
Whereas women who receive a lower second (2.2) class degree as opposed to a 2.1 earn 7% less, and men earn 11% lower. Obtaining below a 2.2 degree is associated with 15% lower earnings for women and 18% lower earnings for men, compared with a 2.1.
The research commissioned by the Department for Education, examines the financial benefit associated with different degree classifications. It shows that payoffs for a higher class degree vary by subject.
For men and women studying law or economics, getting a 2.2 rather than a 2.1 is associated with more than 15% lower earnings, whereas there is no significant difference for those studying education or English.
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Achieving at least a 2.1 was found to have a much higher payoff at more selective universities.
"Controlling for observable characteristics, both men and women who obtain a 2.2 from Oxford University, Cambridge, Imperial College London and the London School of Economics, earn 20% less on average at age 30 than those who achieve a 2.1," the IFS said. This compared with around 6% for women and 8% for men who got lower second class degrees from the least selective universities.
Economists have warned that students from lower socio-economic backgrounds face more barriers as fewer have access to elite universities like Oxford and Cambridge.
"The findings imply that degree classification may matter as much as university attended for later life earnings," said Ben Waltmann, senior research economist at IFS and a co-author of the report.
"Other things equal, going to a more selective university is good for future earnings, and the fact that few students from disadvantaged backgrounds attend the most selective universities is a barrier to social mobility."
The IFS said there were "stark gender differences" in the payoff to achieving a first class degree at a very selective university.
At the most selective universities, the average payoff to a first class degree versus a 2.1 is near zero for women, compared to around 14% for men.
The think tank added the findings suggest that fewer high-achieving women go on to high-earning careers.
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