Rich students earn 10% more despite studying the same degree
A new study has revealed worrying links between a student's family background and their earnings in later life. The results have thrown up a few surprises...
According to a new study released by the Institute of Fiscal Studies (IFS), students from the wealthiest 20% of households in the UK will move on to earn salaries that are 10% higher than classmates doing the same degree at the same uni.
The IFS found that male graduates from richer families earn on average £8,000 a year more than their fellow male alumni, whilst wealthy females earn £5,300 more on average than other women in their class.
The research has (understandably) prompted questions over whether or not enough is being done to help less advantaged graduates secure a good job.
Inequality is rife in the UK
The message that this report is communicating is loud and clear: inequality is still rife in the UK, and sadly the education system is by no means an exception.
Megan Dunn, head of NUS (National Union of Students) has voiced her concerns about what the study has revealed. She said:
It’s hugely disappointing to see women and poorer graduates are facing such a massive disadvantage in the workplace. The marketisation of education is failing students and graduates.
Dunn also drew attention to the worrying fact that despite recent findings that women not only outnumber men at university but are also getting better grades at school compared with their male classmates, men are still moving on to make substantially more money later in life.
This gender pay gap is most shocking in the highest paid positions such as medicine, with women earning an average of £45,000, whereas male doctors take home around £55,000.
Does your University determine your salary?
Sadly, the IFS' research also found that graduates from lower performing universities earn less on average than those who didn't go to university. We also found in our Student Money Survey last year that 55% of students said they didn't think their course offered value for money.
This finding is particularly disillusioning for students currently studying at unis that don't make it into the top rankings, but perhaps one that shouldn't be taken too seriously.
The idea that lower-performing universities are producing graduates that could be better off saving themselves £40k by not going to university at all is extremely demotivating, but don't let this give you the impression you're wasting your time!
The apprenticeship vs. university debate
It's likely that this study has included those who choose to move into an apprenticeship scheme after school instead of university. Apprenticeship schemes can bag you a great salary, but these schemes do train you for one particular career, making it harder to change your path later down the line, whereas a uni degree is more flexible.
Check out our apprenceships vs. university debate to see which is right for you – the most important thing is that you make choices that cater to your interests just as much as your salary expectations.
If you're a graduate (or soon-to-be graduate) and you're worried about job prospects, speak to one of the careers advisors at your university. They're trained to help you find your way in our increasingly competitive job market, so take advantage of this!