Getting the same degree from the same university doesn’t guarantee people will earn similar amounts later in life.
Those from richer family backgrounds tend to earn significantly more than their fellow graduates from poorer backgrounds, according to a new study that analyzed the tax returns and student loan records of 260,000 British graduates.
Ten years after leaving university, the average graduate from a higher-income background earned about 10% more than the average graduate from a less prosperous background — even after factoring in where and what subject they studied, the researchers found.
“This work shows that the advantages of coming from a high-income family persist for graduates right into the labor market at age 30,” said Jack Britton, a research economist at the Institute for Fiscal Studies, one of the organizations involved in the study.
The researchers also came from Harvard University, the University of Cambridge and the Institute of Education.
Of course, the income of a student’s family isn’t the only factor affecting future earnings.
The researchers found thatthe particular university a graduate attended resulted in “big differences” inthe amount of money they made down the line.
Students from three of Britain’s top schools appeared to have an especially high chance of pulling in the big bucks.
Ten years after getting their degrees, more than 10% of male graduates from Cambridge, Oxford and the London School of Economics were earning more than £100,000 ($142,000) a year. And the London School of Economics was also the only institution where more than 10% of female graduates were making more than £100,000 after 10 years.
The subjects people studied also had an impact on their earnings.
Medicine and economics graduates fared particularly well, the researchers found. Those who studied the creative arts did the worst, failing to earn more thanthose who did not receive a college degree.
Butoverall, finishing university definitely pays off, the study suggested.
Non-graduates were twice as likely to have no earnings as those who completed their studies, it said.
In the U.S., research has shown that people from wealthy families are far more likely to earn bachelor’s degrees than those from poor families.