'Graduate Premium' Makes A Much Bigger Difference If You're A Woman With A Degree, Research Finds

Why Having A Degree Is Much More Valuable If You're Female

Going to university makes a bigger difference to women's earnings than it does to men's, according to new research that suggests the ‘graduate premium’ is more pronounced if you're female.

English women with degrees earn over three times more than women without degrees ten years after graduating, the study found. In comparison, male graduates earn around twice those of men without a degree.

There is also less of a gender pay gap between men and women both have degrees, according to the researchers from the Institute for Fiscal Studies (IFS), Harvard University and the University of Cambridge.

Students graduating from university could earn up to three times more than non-graduates

The study lays bare the difference in wages between those who do and don’t study at university, known as the ‘graduate premium’, using data from 260,000 people.

It found a male graduate earns around 23% more than female graduates 10 years on, a smaller difference than the average gap between men and women overall, which is around 33% according to the Labour Force Survey.

A decade after graduating, one in ten male graduates earns more than £55,000 per annum, 5% were earning more than £73,000 and 1% were earning more than £148,000.

For women, the average salaries were lower: 10 years on, 10% of female graduates were earning more than £43,000 per annum, 5% were earning more than £54,000 and 1% were earning more than £89,000.

Women's earnings took a harder hit than men during in the recession, the report reveals: “Female graduates in their late 20s saw their real earnings decline just as, in normal times, they would have expected rapid earnings growth as they gained experience."

“The study shows that the recession had a large impact on the earnings of people in their twenties and early thirties. This is particularly true for women, who experienced much lower earnings than previous cohorts."

Emily Sawyer, a spokesperson for the London Feminist Network, told The Huffington Post UK: "It is good that more research has been done on the gender pay gap. The research shows that recent female graduates benefit financially from their degree more than men, compared to other women. But it also shows that men continue to earn more than women and that recession has affected women's wages badly - more so than men. It is unacceptable that the pay gap continues to be a reality for most women. This needs to change."

Jack Britton, a research economist at the IFS and an author of the working paper, said: “This 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.”

Both graduates and non-graduates saw their wages fall in the recession, but people who had been to university saw “proportionally smaller drops in their earnings”.

The University of Cambridge

The researchers used tax data and student loan records for over 260,000 graduates. They covered the time period up to 10 years after those at university graduated.

They claim it is the first time a “big data approach” has been used to look at graduate earnings.

Anna Vignoles of the University of Cambridge and the IFS, said: “This study illustrates the power of using big data to better understand the graduate labour market and shows that previously we have underestimated the earnings of top graduates.”


What's Hot