The Earnings Gap

University graduates who went to independent schools earn more than their peers from state schools, new Warwick research shows.

Graduates who went to independent schools earn substantially more than those who went to state schools, according to new research by Claire Crawford, Assistant Professor in the Department of Economics at the University of Warwick.

Independent school graduates earn 7 percent more than their state school peers – even when they attend the same university, study the same subjects and graduate with the same degree class.

Part of that earnings gap is explained by the fact that, on average, independent school graduates attend more prestigious universities and study subjects which tend to be more highly rewarded.

But even amongst graduates who went to the same university to study the same subject and who left with the same degree class, independent school graduates still earn 7 percent more, on average, three and a half years after finishing university than their state-educated peers.

This difference does not arise because graduates who attended independent schools are more likely to enter higher paid professions: comparisons of graduates in the same occupations show that those who went to an independent school still earn 6 percent more, on average, than those who went to a state school.

The wage gap persists even when taking into account that graduates from independent schools are more likely to go into higher-paying occupations.

These are the main findings of a report, ‘Heterogeneity in graduate earnings by socio-economic background’, written by Crawford and Anna Vignoles, Professor of Education at the University of Cambridge. The analysis was undertaken for the Institute for Fiscal Studies (IFS), a politically independent research organization, and funded by the Nuffield Foundation, a charitable trust that funds research aimed at improving well-being. Crawford and Vignoles are research fellows at IFS.

Their work examined the earnings of graduates who left university in 2007 approximately 3.5 years after they graduated (January 2011). It compared the earnings of those who had previously attended a state school with those who had previously attended an independent school while doing their A-levels. Their findings:

• Aongst graduates who are in work 3.5 years after leaving university, those who previously attended an independent school earn 17 percent more, on average, than those who attended a state school.

• Some of this difference arises because independent school students are, on average, more likely to go to more research-intensive universities and study subjects which tend to be more highly rewarded. But even after accounting for that difference, graduates who previously attended an independent school still earn 7 percent more, on average, than graduates who previously attended a state school.

• The wage gap cannot be entirely explained by the fact that graduates from independent schools are more likely to go into higher-paying occupations. Those from independent schools still earn an average of 6 percent more than their state-school peers even when they have the same backgrounds, studied the same subject in the same university and went into the same occupation. This is equivalent to around £1,500 more per year, on average, the data show.

‘Education is often regarded as a route to social mobility, but our research shows that, even amongst those who succeed in obtaining a degree, family background – and in particular the type of school they went to – continues to influence their success in the work place,’ Crawford said.

‘These results suggest that there is a pressing need to understand why private schooling confers such an advantage in the labour market, even amongst similarly achieving graduates, and why higher education does not appear to be the leveler it was hoped to be.’