Graduates out-earn peers with same GCSEs but no degree

Graduates go on to earn higher average salaries than those who received similar GCSE results but did not obtain a degree, according to the first release of recently remodelled post-university outcomes data.

Department for Education (DfE) statistics published on 25 June find the median earnings of those with a first degree five years after finishing their studies is £33,000.

Based on the 2023-24 tax year, that figure is up 2.3 per cent in real terms since 2022-23, and compares with an average salary of between £18,300 and £25,600 for women and £24,500 and £34,000 for men with no higher level qualification.

For the first time, the graduate labour market outcomes release, which now incorporates Longitudinal Education Outcomes (LEO) data and labour market statistics after changes made last year, compares individuals of the same sex who had similar attainment at GCSE level. It finds graduates have higher median earnings than those with no higher level qualification.

“These results are for ten years after GCSEs only, when individuals are typically in their mid-20s, so they do not reflect the impact of qualification levels on earnings growth throughout individuals’ working lives,” the analysis cautions. 

The findings were released the same day as new figures by the Institute for Fiscal Studies (IFS), which show degrees still boost lifetime pay for most graduates. 

This IFS research estimated that today’s average graduate can expect to be about £100,000 (15 per cent) better off financially than a similar young person who did not go to university, though different subject pathways produce different results and a quarter saw a negative return.

The government data finds that when comparing people with the same sex and similar GCSE results, the proportion in sustained employment or further study at ten years after GCSEs is “consistently higher” for degree-holders than for those with no higher level qualification.

This applies across all combinations of sex, prior GCSE attainment, and subject studied, the data reveals – though five years on, veterinary sciences had the highest proportion of graduates in sustained employment, further study or a mix of both.

Looking at individuals a decade on from completing their GCSEs in the 2012-13 academic year, the research shows female graduates in STEM earned between £8,700 and £12,800 more than their counterparts with similar school grades but no degree.

For men in the same field, graduates earned between £2,900 and £7,700 more.

Women who studied law, economics, business or management subjects went on to earn salaries between £6,200 and £13,200 higher than their contemporaries, and men between £2,600 and £11,000 more.

The gap between graduates and non-graduates with similar GCSEs also manifested in other subjects less often associated with greater pay – though only for women.

Female degree-holders who studied subjects including history, politics, English, and health and social care earned between £4,000 and £5,500 more in the 2023-24 tax year than their peers with no degree.

But men who studied these subjects made on average between £2,200 and £700 less than male non-graduates in their GCSE attainment bracket.

The differences in earnings between graduates and those with no higher level qualification are “typically greatest” for those in either the top 20 per cent or bottom 20 per cent of GCSE holders, the analysis notes.

The gap is measured across five quintiles, in which the lowest GCSE attainment is given as four C grades and one E, and the highest as four A*s and four As.

Meanwhile, median earnings were highest in the five years after finishing their studies for graduates of medicine and dentistry, and lowest for those who had done a degree in the performing arts.

Those who studied apprenticeships at level 4 or 5 (equivalent to the first year of an undergraduate degree, or a foundation degree) tracked the best, ten years on from their GCSEs.

“Apprenticeships offer the highest returns at this age,” the research states.

Last year, following a consultation, the DfE declared it would discontinue publication of what were then known as the graduate labour market statistics, citing the need to address “quality and relevance”.

The latest results incorporate the most recent survey data from the Office for National Statistics’ labour force survey and graduate outcomes compiled by the Higher Education Statistics Agency as well as the latest available year of LEO data.

georgia.luckhurst@timeshighereducation.com