Two reports recently released by the Institute for Education (IOE) and the Institute for Fiscal Studies (IFS) suggest that a graduate’s pay is affected by their upbringing and their parents’ education.
According to the IOE, having a degree doesn’t close the gap between rich and poor. The report indicates that graduates whose parents did not attend university are likely to earn less than graduates whose parents also have a degree. In addition, the report highlights that graduates who attended private school are likely to earn more than their state-educated peers.
The pay gap is large: on average, male graduates with less educated parents earn 20% less than graduates with the same degree who have highly educated parents. The difference between female graduates was 11%.
At the same time, a report released by the IFS concludes that, three years after graduation, privately educated graduates are likely to earn 17% more than their state-educated counterparts. The report also claims that “Results show that earnings differences persist even within occupations, with graduates who attended private schools earning 6% more than their state school compatriots working in the same occupations”.
The reports indicate high levels of educational inequality and a lack of social mobility are rife in economically developed countries like the UK. Internationally, the pay gap between the earnings of graduates with graduate parents and those whose parents do not hold degrees was much lower; the difference stands at 6% in countries such as Germany and the Netherlands.
The IFS report argues: “Clearly these results have implications for social mobility if socio-economic status is influencing the point at which graduates enter the labour market and the progression they subsequently make”.
Some have suggested that these huge inequalities could be put down to the importance placed on the institution from which a student graduates. Trends in the UK show that students from private schools tend to study at universities that are ranked higher in the league tables. This could explain privately educated graduates’ subsequent income, although this does not explain the gap in income between privately and state- educated graduates who studied at the same institution.