New analysis shows students who choose to learn more, earn more

The analysis by Universities UK of data that tracks earnings from the age of 17 to 31 shows most graduates rapidly catch-up with and overtake non-graduates, despite having fewer years in the labour market, and this difference is sustained throughout their careers. The salary difference increases throughout their careers, even after the costs of studying – and higher taxes – are factored in. Graduates earn more than non-graduates across all regions of the country, where our universities are located. This regional perspective helps take into account local labour markets.

Crucially, these differences are not reflected in the government’s metrics for assessing course success. Currently, the measures used by the Office for Students only go up to 15 months after graduation – therefore not taking future progression into account.

Welcoming the new analysis, Vivienne Stern MBE, Chief Executive of Universities UK said:

The new analysis compared earnings for graduates with contemporaries who held the right qualifications to enter higher education but opted to seek employment instead. The new figures, based on government data linking student and tax records, show that on average: 

• Graduates overtake those who chose not to go university within just a few years, earning at least 20% more once they are in their mid-20s. By age 31, graduates typically earn 37% more, and the gap is slightly higher (38%) for those from economically deprived areas
• Graduate earnings increase at a faster rate than those of non graduates. Between the ages of 23 and 31 average earnings grow by 72% for graduates compared to 31% for non graduates. For those who were previously on Free School Meals average graduate earnings growth is 75% compared to 26% for non graduates.
• Graduates aged over thirty are more likely to be in work, and far less likely to be claiming benefits, than those without a degree.
• On average for the tax year 2020-21, graduate earnings are higher than earnings for non-graduates in all regions.

On average, earnings for graduates are higher over time regardless of socio-economic background. Graduates from a free school meals background will typically earn over a third more than non-graduates (who could have gone to university but chose not to) from the same background by the age of 31. 

Again, on average, those who could have chosen university but opted to seek employment instead are more likely to be claiming out-of-work benefits by age 31. This is twice as likely in the North West (2% of graduates and 5% of non-graduates claiming out of work benefits), and up to four times as likely in some parts of the country (such as the South West, South East, East Midlands and East of England where 1% of graduates claim benefits compared to 4% of non-graduates).

Vivienne Stern continued:

Notes

For more information, see our analysis: Graduate employment outcomes: Analysis by Universities UK (pdf)