LONDON (BLOOMBERG) - Achieving high marks at university pays off, especially for men and people who attend the most selective institutions, a study of British graduates found.
The Institute for Fiscal Studies said the average wage premium at age 30 for those gaining a first-class undergraduate degree was 7 per cent for men and 4 per cent for women.
Getting a lower second-class 2.2 degree or below brings 15 per cent lower earnings for women and 18 per cent less for men.
The findings suggest that access to elite jobs paying top salaries depends on what students study, which schools they attend and how well they do. It also sheds light on the barriers to getting ahead faced by those from poorer families.
"Degree classification may matter as much as university attended for later life earnings," said Mr Ben Waltmann, senior research economist at the IFS. "Going to a more selective university is good for future earnings. The fact that few students from disadvantaged backgrounds attend the most selective universities is a barrier to social mobility."
The researchers found the effects on pay were amplified for students who attend the most prestigious universities, including Oxford, Cambridge, Imperial College London and the London School of Economics.
It also mattered more for some subjects and less for others. There was little premium paid for those studying English or education, regardless of the quality of the degree.
The findings showed large gender differences in the payoff for gaining a first-class degree at the most selective universities rather than an upper second-class 2.1.
Women tended to get nothing extra while men enjoyed a 14 per cent premium. The researchers said that suggests fewer women who reach the highest marks in university go on to high-earning careers.
"For many subjects, the difference between a first and a 2.1 is inconsequential for earnings," said Mr Jack Britton, associate director at the IFS and a reader at the University of York. "For others, such as economics, law, business computing and pharmacology, it's substantial."
The study tapped data for the first time from the UK Department of Education's Longitudinal Education Outcomes survey.