‘Privilege pays’ as rich graduates ‘out-earn’ disadvantaged peers

University graduates from low socio-economic backgrounds earn less than their better-off peers, even taking into account university attended and subject studied, according to a UK report.

The Centre for Transforming Access and Student Outcomes (Taso), an independent charity, said its research shows that “privilege continues to pay” after university, and called for more action to narrow the earnings gap.

Taso’s study of existing literature shows that higher education is linked to clear economic benefits for disadvantaged students, with those who complete higher education securing higher future earnings than those who do not.

The best available evidence estimated that young people receiving free school meals earned £8,300 more in annual earnings 15 years after Key Stage 4 if they went to university than those who did not.

However, most research also showed that disadvantaged graduates could expect to earn about £4,000 less than advantaged graduates – even after considering the university attended or subject studied.

Eliza Kozman, deputy director at Taso, said: “A student’s background should not predict their future.

“But the evidence shows that privilege continues to pay after university. Students from low socio-economic backgrounds deserve to reap the same rewards as their advantaged peers after graduation.

“While narrowing the gap in earnings is an increasing priority for the higher education sector, more work is needed to make this a reality.”

The research – which consists of a rapid evidence review and an analysis of publicly available UK Households Survey data – also found that entry tariff scores for higher education courses appear to explain more of the average earnings gap between disadvantaged and advantaged graduates than subject choice.

Researchers did note that some research had been conducted into how subject choice and provider impacted disadvantaged students’ earnings, with one study finding that medicine and education have higher relative financial returns for them.

But in their evidence review of 78 papers, the researchers found little existing evidence on the role of other factors, such as gender, ethnicity and prior attainment, on the outcomes of disadvantaged graduates.

The report, which was developed by State of Life, which provides “social impact analysis”, and the data consultancy Mime on behalf of Taso, calls for further research to identify the impact of these additional demographic factors.

It also recommends that higher education providers do more to address the gap in labour market outcomes between disadvantaged graduates and their more privileged peers.

And researchers said there was clear need for more evidence on the non-economic outcomes for disadvantaged graduates.

There is some research showing that an undergraduate degree is linked to improvements in mental health for graduates from low socio-economic backgrounds, compared with graduates from high socio-economic backgrounds.

Recent figures from the Office for Students, which initially funded Taso, showed that the gap in completion rates between disadvantaged students in England and their more advantaged peers has risen to record levels.

patrick.jack@timeshighereducation.com