Richer students earn more than less wealthy peers on same course

The study also found that six per cent of males and three per cent of females who studied law earned in excess of £100,000 ten years after graduation.

Funded by the Nuffield Foundation, and carried out by researchers at the Institute for Fiscal Studies (IFS), Institute of Education (IoE), Harvard University and the University of Cambridge, the study found that those from richer backgrounds (defined as being from approximately the top 20 per cent of households of those applying to higher education in terms of family income) did better in the labour market than the other 80 per cent of students.

The research used anonymised tax data and student loan records for 260,000 students up to ten years after graduation.

The study found that even after taking account of subject studied and the characteristics of the institution of study, the average student from a higher-income background earned about 10 per cent more than the average student from other backgrounds.

There are particularly big differences in earnings according to which university was attended. This is in large part driven by differences in entry requirements the authors say.

More than 10 per cent of male graduates from the London School of Economics (LSE), Oxford and Cambridge were earning in excess of £100,000 a year ten years after graduation in 2012/13, with LSE graduates earning the most. LSE was the only institution with more than 10 per cent of its female graduates earning in excess of £100,000 a year ten years on.

A large number of institutions (36 for men and 10 for women) had 10 per cent of their graduates earning more than £60,000 a year ten years on.

Differences in earnings according to subject studied are also very substantial. Medical students were easily the highest earners at the median ten years out, followed by those who studied economics. For men, median earnings for medical graduates were about £50,000 after ten years, and those for economics graduates were about £40,000.

For males, it is estimated that approximately 12 per cent of economics graduates earned above £100,000 some ten years after graduation; by contrast, six per cent of those studying medicine or law earned more than £100,000.

For females, it is estimated that approximately nine per cent of economics graduates earned above £100,000 some ten years after graduation; by contrast, just one per cent of those studying medicine and three per cent of those studying law did so.

Both male and female medical graduates earn around £14,000 more at the median than similar law graduates.

Jack Britton, a research economist at the IFS and an author of the paper, said: “This work shows that the advantages of coming from a high-income family persist for graduates right into the labour market at age 30.

“While this finding doesn’t necessarily implicate either universities or firms, it is of crucial importance for policymakers trying to tackle social immobility.”