Women with degrees earn three times as much as female non-graduates

pay gap

By Émer O’Toole, Editor-in-Chief


Female graduates earn triple the yearly pay of female non-graduates within a decade of leaving university, according to the first large-scale study into the impact of higher education on wages and salaries in the UK.

A study conducted by the Institute for Fiscal Studies, Cambridge and Harvard universities found that the graduate premium for women was greater than for men, even though male graduates on average earned more.

Men can double their pay if they went to university, according to their analysis of salary data held by the Student Loans Company and HM Revenue & Customs.

While a female non-graduate in her early thirties takes home £6,300 median pay, women graduates earn £19,500. For men, graduates earn £25,200 in median income but non-graduates £10,700.

The researchers used anonymous tax data and student loan records for the more than 260,000 graduates who studied between 1998 and 2011, looking at their earnings for the year 2011-2012.

It found that 10 years after graduation, 10% of male graduates were earning more than £55,000 a year, 5% were earning more than £73,000, and 1% were earning more than £148,000. Ten years after graduation, 10% of female graduates were earning more than £43,000 a year, 5% were earning more than £54,000 and 1% were earning more than £89,000.

The median figure for a non-graduate woman in her early 30s is £6,300 and for a man £10,700. For graduates, the figures are £19,500 and £25,200, respectively.

Researchers said their data also suggested the gender pay gap among graduates was smaller than government statistics implied. The research found the male–female annual earnings gap 10 years after graduation was about 23%, whereas the official Labour Force Survey put it at about 33%.

Jack Britton, a research economist at the IFS and an author of the working paper, said the study shows “the value of a degree, in terms of providing protection from low income and shielding graduates from some of the negative impact of the recent recession on their wages.”

“We find this to be particularly true for women.”

Anna Vignoles of Cambridge University said: “This study illustrates the power of using ‘big data’ to better understand the graduate labour market.

“It shows that previously we have underestimated the earnings of top graduates.”

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