Large gender disparity in graduate premium across OECD, data show

Figures from Education at a Glance show that only in Spain and Estonia can women expect a bigger financial return from university than men 

September 20, 2017
Japanese metro
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Women see a higher net return from university study than men in just two developed nations, according to the latest set of education data from the Organisation for Economic Cooperation and Development.

Figures published in the OECD’s 2017 Education at a Glance report – published on 12 September – show that out of 28 countries where data were available, only in Spain and Estonia was the net graduate premium higher for women.

The net financial return for female graduates in Spain is $195,300 (£147,400), which is almost $43,000 more than the net return for male degree holders. In Estonia, women can expect a graduate premium of $116,500, which is just over $27,000 more than men.

In the 26 other countries where figures were available, men had a higher net graduate premium (calculated by taking the extra money earned by graduates compared with school-leavers and subtracting costs such as tuition fees and forgone earnings while at university).

In seven countries, the “gender gap” in the net graduate premium was more than 50 per cent. The highest disparity was in Japan, where male graduates can expect a net financial return of almost $240,000, compared with just $28,200 for women.

The biggest female graduate premium was in Luxembourg, where women with degrees could expect to earn almost $330,000 more than those who went straight into work after leaving school. However, this is smaller than the country’s male graduate premium, which is $374,500.

According to the data, the countries with the most equal graduate premiums were the Netherlands (a gender gap of 5.9 per cent) and Norway (6.7 per cent). Across the OECD, the average gap was 33.6 per cent, with men earning a graduate premium of about $250,000 and women about $170,000.

Andreas Schleicher, the OECD’s director for education and skills, said that although the costs of university study tended to be very similar across countries for men and women, it was the difference in financial benefits that produced the gender variation.

This was the result of factors such women’s choice of subjects – other OECD data show that women are much less likely to study some science subjects that offer higher financial returns – or of their being more likely to work part-time, he explained.

Patti McGill Peterson, senior fellow at the American Council on Education’s Center for Internationalization and Global Engagement, said that it was “noteworthy” that women continued to face a “fairly long-term and tenacious wage gap” across the OECD despite having achieved parity in terms of higher education participation.

Like Mr Schleicher, she also pointed to the fact women were less likely to study subjects such as engineering that lead to high-paying jobs while drawing attention to the responsibilities of childcare still being “carried predominantly by women in many societies, including OECD countries”. 

“Where there is strong support for parental leave without penalty and childcare [provision] in a country such as Norway, there seems to be less wage disparity,” Dr Peterson said, although she added that there were also examples of countries such as Denmark where there was a large gender gap in graduate returns despite there being good parental support from the state.

“The dearth of women at the highest level of private-sector jobs, where the pay is greatest, is another contributing factor,” she said of the global picture. “These elements combine to make the pay gap very persistent around the world.”

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