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Going to university gives women a 50% earnings boost

Cherry Reynard
Written By:
Cherry Reynard

The majority of graduates earn more than their peers by age 29, but there still some institutions and subjects where graduates are worse off than they would have been had they not gone at all.

There are 18 universities with average returns of more than 20%. There is a notable difference between men and women, with higher education attainment having a greater impact on women’s earnings, according to the study by the Institute for Fiscal Studies (IFS) on behalf of the Department for Education.

For men, studying creative arts, English or philosophy actually reduces average earnings at age 29, and 4% of men attend institutions that have statistically significant negative average returns. However, studying medicine or economics increases earnings at age 29 by more than 20% on average.

For women, all higher education increases average earnings, but studying economics or medicine increases their age 29 earnings by around 60%.

The study showed that at age 29 the average man who attended higher education earns around 25% more than the average man (with five A*-C GCSEs) who did not. For women the gap is more than 50%. However, the IFS pointed out that a large portion of this difference can be explained by differences in pre-university characteristics: a typical higher student has higher prior attainment and is more likely to have come from a wealthy family. They would therefore be expected to earn more, even had they not gone to university.

Once these differences are factored in, the average impact of attending higher education on earnings at age 29 is 26% for women and 6% for men. However, this earnings gap is only measured up to 29 and previous studies show that male graduates go on to earn considerably more than their peers.

The Office of Students, the new regulator set up to look out for students’ interests, is already using its powers to tackle institutions with poor student outcomes data, imposing additional registrations conditions on universities including London Metropolitan University and Bolton University in response to specific concerns. Both are now required to construct an improvement plan around their continuation and completion rates.

Universities minister Sam Gyimah said: “I want to see our universities competing on the quality of what they offer, value for money and strong positive outcomes for their students so that every degree is worth the investment.

“This landmark research proves that the graduate earnings premium remains robust…Higher education is delivering for students, the taxpayer and the economy, and will continue to do so as long as we focus relentlessly on quality.

“The graduate earnings premium could be even higher if all prospective students have the best information possible about where and what they study when making choices. The research we’re publishing today, alongside other data like the Teaching Excellence Framework and our Open Data prize, will help make this a reality. Many of the universities whose graduates enjoy high earnings premiums have strong links to employers and have built in work experience to help develop the skills that graduates need.”

On the average salary of £27,600, a 25% uplift brings it to £34,500. This £6,900 before tax figure is still some way below annual tuition fees of £9,250, suggesting that it may still take some time for higher education to merit its cost.