1. Education, achievements and labour market outcomes A presentation to the Graduate Labour Market Forum, 15 th December 2003, Westminster, London Peter Elias, University of Warwick Kate Purcell and Nick Wilton, University of the West of England

2. Does it pay to go to university? How has the premium associated with a first degree changed over the last 15 years? What factors are associated with higher earnings? What other benefits do we find associated with higher education? How are women faring relative to men?

3. How has the premium associated with a degree changed over the last 15 years? Previously we showed that there was some evidence of a decline in the graduate earnings premium, but still significant and major differences in the rate of growth of earnings of graduates compared with non-graduates What kind of earnings growth would we expect?

4. What is the average real rate of growth of earnings for young degree- holders and non degree holders? Use Labour Force Survey (1993-2000) to determine the average annual rate of growth of real earnings between ages 22 and 29 (full-time gross weekly earnings) DegreeNo degree Men9.7% p.a.5.3% p.a. Women7.9% p.a.4.9% p.a.

10. What factors are associated with higher earnings? Conducted a detailed multivariate analysis of the variations in earnings of graduates in full- time employment in 2002/03 (excluding those aged 38 and over) Tested for variations associated with social class, entry qualifications, class of degree, post graduate qualifications, type of institution, age, gender, a range of job characteristics and family situation

11. What factors are strongly related to variations in earnings? Working hours (1% per hour) Degree required (18% addition) Sector (ICT, banking, business services – 15%) Private sector (10% more than public sector) Size of firm (10% less if only 1-9 employees) Age (10% more per year) Disability (10% less)

12. Class of degree (12% less for a third class) Subject studied (Arts -17%, languages -9%, maths & computing +9% relative to social sciences) Entry qualifications (<16 UCAS points -6%) Lives in London and SE (+26% for Inner London) Postgraduate qualification (see next slides) SOC(HE) (see next slides) What factors are strongly related to variations in earnings? (contd.)

13. The London premium (relative to graduates working in the rest of the UK

14. Well the City definitely is linked in with financial reward I mean that’s very clear, I mean one of the problems I face now is I could step out of the City into a corporate role but looking at the salaries that are paid, it’s horrendous, you know we’re talking a lifestyle change which I’m not entirely keen to make. (Freelance finance consultant, graduated in Russian and German from old university, male age 31)

15. Courses taken since 1995

18. What about social class and gender? Social class is not directly associated with variations in earnings – effects are indirect – but, fee-paying school still adds 5% seven years after graduation! Type of university attended does have some impact, but only for very small number of institutions Gender differences remain (8% more for men)

19. +7% -8%

21. What about the future? At the point I am at now, if I wasn’t having a baby, I may well have looked or be looking for another job in the next 6 months, purely because I’ve been promoted from within and they never reward you adequately. They never give you the same salary as they would if they recruited externally. I am dissatisfied with my salary at the moment, but I can’t really say anything to the people I work with because I am maternity leave and they’ve known I would be going on maternity leave for quite some time. It’s going to be something I am going to have to address when I get back. (Merchandising manager working for global corporation, graduated in business & financial services, female age 29)