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Better Degrees Really Do Help You Earn More

Graduates who get a good degree will earn more money than their peers for more than a decade, a new study has found.

The study shows that those who get a first or a 2:1 - earn more than those getting a 2:2 or a third.

It looked at graduates who were born in 1970 and graduated in 1991, and found those with first of 2:1 degrees earned 7-9 per cent more five years after graduation. 

The study, published by the London School of Economics, also found that the gap between earnings according to university performance is also widening as more people opt for a university education.

On their findings, the group wrote: 'As more young people obtain degrees, the premium for graduating with a good class of degree increases.'

Previous studies have shows the wage disparity between people who go to university and those without a degree, but not a link between earnings and the class of degree.

The authors - Robin Naylor and Jeremy Smith of the University of Warwick and Shqiponja Telhaj of the University of Sussex - claim this is surprising as previous studies have shown that employers filter out applications from people with lower class degrees. 

Mr Telhaj said: 'We obtain an estimate of a wage premium of 7%-8% for a good degree (a first or upper second) relative to a lower degree (a lower second or third) at the ages of 30 and 38.

'We view the estimated premium to be large when we consider that our estimate of the premium for a lower degree relative to A-levels is 11% at age 30.'

However, it does also note that those who get a third-class degree could end up closing the gap because of grade inflation leading to universities issuing more higher class degrees. 

  • Date published: 16th February 2016
  • Photography by: KareokeRobot

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