A recent study on graduate income has revealed that students from wealthy backgrounds go on to earn more than those from less well-off families. The findings of the report also indicate a disparity in the earnings of men and women, as well as differences based upon the course studied and institution attended by the graduate.
The study was a collaboration between the Institute for Fiscal Studies, Institute of Education, University of Cambridge and Harvard University, with funding from the Nuffield Foundation. The Institute for Fiscal Studies’ (IFS) press release states ‘the average student from a higher-income background earned about 10% more than the average student from other backgrounds.’
The disparity grew at the very top of the earnings spectrum. ‘The 10% highest-earning male graduates from richer backgrounds earned about 20% more than the 10% highest earners from relatively poorer backgrounds even after taking account of subject and the characteristics of the university attended. The equivalent premium for the 10% highest-earning female graduates from richer backgrounds was 14%.’
Oxford was no exception in the study. While ‘more than 10% of male graduates from LSE, Oxford and Cambridge were earning in excess of £100,000 a year ten years after graduation in 2012/13’ only LSE had over 10% of its female graduates earning above the same figure.
Zoe Fannon, currently reading for an MPhil in Economics, told Cherwell, “the question in both cases is why individuals from less-wealthy families and female graduates seem to not end up in the high-paid jobs.”
She was eager to address the information the study was based on and said “they only have data on the graduates who took out loans from the Student Loan Company.” As a result of how income thresholds are calculated, “the graduates from wealthy families are mostly people whose parents are professionals rather than people whose parents own companies or run hedge funds (because they would likely pay fees straight up rather than taking out a loan).”
On the issue of why those from wealthier backgrounds might do better than their peers in competition for the very highest earning jobs, the study offers suggestions but no firm answer. According to one postgraduate with experience in business and hiring processes however, “it remains an unfortunate reality that wealthy, influential families have connections that can give certain graduates an unfair advantage in hiring processes for highly-paid roles.”
Jonathan Black, director of the Oxford Careers Service, highlighted the initiatives run by the university that aim to address any disadvantages brought about by household income or gender. He told Cherwell, “the Careers Service provides connections with alumni (to address any social capital deficits) for students, and training programmes are being introduced (eg, Springboard for women students) to address any confidence issues.
“The Moritz-Heyman scholarships programme, which particularly targets students from low-income and disadvantaged backgrounds, includes as part of its support for on-course students funded internship opportunities that allow students to pursue valuable work experience while having their costs covered.”