Students with richer parents earn more than poorer ones studying at the same university

Graduates from well-off backgrounds earn significantly more after university than their poorer counterparts, even after studying for the same degrees at the same universities.

A report released by the Institute for Fiscal Studies (IFS) looked at the link between earnings, background, degree subject and university attended of 260,000 students over the ten years after graduation. They found those from the top 20 per cent of households did better in the job market than the other 80 per cent of their peers.

The data showed that in 2012/13, the average gap in earnings between higher and lower income students, 10 years after graduation, was £8000 for men and £5,300 a year for women.

After accounting for the degree studied and the institution they studied at, those with wealthy parents earn on average 10 per cent more a year than average students from other backgrounds. The gap gets bigger when you look at the highest earning male graduates from rich and poor backgrounds: the richest get 20 per cent more than the poor.

“This work shows that the advantages of coming from a high-income family persist for graduates right into the labour market at age 30,” said Jack Britton, an author of the report.

The report also showed that the subject you do, and which university you do it at, drastically affects your earnings and job prospects after graduation. Some non-graduates earn more over 10 years than those who attended the lowest performing universities.

“The research illustrates strongly that for most graduates, higher education leads to much better earnings than those earned by non-graduates,” says Anna Vignoles, an author of the paper. “Although students need to realise that their subject choice is important in determining how much of an earnings advantage they will have.”

“This latest analysis reveals the worrying gaps that still exist in graduate outcomes,” said universities minister Jo Johnson.

The report concludes that the highest earners were those from better-off backgrounds who studied economics and medicine at LSE, Oxford, and Cambridge.