Private education wins higher salaries for young graduates

Unlevel playing field. David Cheskin/PA Wire

University is often seen as a route to social mobility, providing the chance for all students to get higher status and better paid jobs no matter what kind of school they went to. But in our new research we found that three and a half years after finishing university, graduates who attended private schools earn an average of 7% more per year than graduates who went to state school. This is even if we compared those who went to the same universities to study the same subjects and who received the same degree class.

Previous research has suggested that education plays an important role in “levelling the playing field” between poor and rich students. This has prompted substantial efforts by the government to improve the school and university results of young people from disadvantaged backgrounds to achieve greater levels of social mobility.

Implicit in these policies is the assumption that once a person has graduated from university, their family background and the school they went to will cease to impact on how much they earn, or that the link will at least be reduced. But our new research proves that there is actually a strong relationship between the kind of schools graduates attended and their success in the labour market.

£1,500 premium

Our work relies on data from a cohort of British graduates who studied full-time for a first degree and graduated from a UK higher education institution in 2006-7. We have measures of earnings six months after graduation as part of the Destination of Leavers from Higher Education survey and then for a subset of the cohort some three and a half years after graduation.

We found that graduates who attended a private school went on to earn significantly more than graduates who went to state schools. As might be expected, some of the higher earnings of graduates who attended private schools is down to the fact that they have better A-level grades and go on to attend more prestigious universities and study subjects which tend to be more highly rewarded.

But even when we accounted for differences in the universities attended, subjects studied and the class of degree achieved, those who went to private school still earn 7% more, on average, than their state-educated contemporaries.

Our previous work found that graduates who attended private schools are more likely to enter higher status and higher paying occupations. But even when we allowed for differences in choice of occupation amongst our sample, we still found that privately educated graduates earn 6% more, on average, than their state-educated peers. This is equivalent to around £1,500 a year in our data.

Networks and fuller CVs

So why does private schooling continue to exert an influence on graduates’ earnings? And why does higher education not level the playing field? Our research cannot provide definitive answers to these questions but there are a number of possible explanations.

It may be that private schools inculcate attitudes, aspirations or other soft skills that help the graduate in the labour market and which could help to explain their higher earnings. Alternatively, it may be that private schools provide opportunities to develop strong personal networks that then help the graduate succeed in the world of work.

Or perhaps families that invest in private schooling also invest in other aspects of their children’s lives that then benefit these children in their early careers. For example, families may spend money on tutors, music lessons, art trips and foreign travel, which could provide additional skills that look good on a CV and prove useful in the labour market.

Since we do not have data on all these aspects of parental inputs, we haven’t been able to separate out their effects on the relationship between private schooling and subsequent earnings. Future research might usefully focus on distinguishing between these alternative explanations for why the influence of family background lingers long beyond graduation.