Graduate premium in starting salaries ‘up by a quarter’

The graduate premium in starting salaries increased by a quarter between 2005 and 2010, according to new research.

March 18, 2013

University leavers in graduate-type jobs earned an average of £6,840 more than workers in other employment in 2010, up from a differential of £5,485 in 2005, analysis from The Complete University Guide shows.

The research, based on data from the Higher Education Statistics Agency, also looks at the premium for graduates (who went on to work in graduate-type jobs) broken down by their subject area.

The starting salary premium for geology graduates rocketed by more than 150 per cent between 2005 and 2010 to £10,329, while nursing graduates saw their premium nearly triple to £5,282.

But there were falls for graduates of other subjects, including Celtic studies (-32 per cent), hospitality, leisure, recreation and tourism (- 29 per cent) and anthropology (-23 per cent).

The analysis only looks at graduates who have secured graduate-type jobs, however. According to statistics released by the Office of National Statistics in March last year more than one in three graduates were working in “lower skilled” jobs at the end of 2011.

But the hourly wage for graduates is 70 per cent higher than for those who have not been to university, the ONS figures show.

Bernard Kingston, principal author of The Complete University Guide, said that the graduate premium figures “clearly demonstrate the decline in the graduate premium in certain subjects, and must be a concern to students when choosing what to study at university when tuition fees exceed £8,000 a year in England and Wales”.

Alex Bols, executive director of the 1994 Group of smaller, research-intensive universities, added: “The advanced skills and knowledge acquired on degree courses prepare graduates to compete in the increasingly competitive global economy. This is one reason why the graduate premium jumped a quarter over the period of study.”

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