If you want to earn more money, it helps to be a man with rich parents and to go to the London School of Economics. That’s the finding of a study of 260,000 British graduates in their first years after leaving university.
A decade after graduation, the gap in annual earnings between the children of wealthy parents and those from poorer backgrounds was 8,000 pounds ($11,400) for men and 5,300 pounds for women in 2012-13. Even controlling for degree course and university, children of the rich earned 10 percent more than students from an average family.
Researchers from four U.S. and U.K. institutes and universities looked at tax data and student loan records for 260,000 graduates to generate the report. Published in the week that Prime Minister David Cameron was forced to defend his late father’s tax affairs and release details of money he’d inherited, it suggests that rich parents pass on much more than just money to their children, including so-called soft skills such as personal presentation and interview technique.
“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 in London and an author of the study. “While this finding doesn’t necessarily implicate either universities or firms, it is of crucial importance for policy makers trying to tackle social immobility.”
It’s not just your parents that make a difference. It’s perhaps not much of a surprise that, a decade after leaving university, 10 percent of graduates from England’s two ancient universities, Oxford and Cambridge, were earning more than 100,000 pounds a year. But they were surpassed by a more recent arrival. Graduates of the LSE were the highest paid of all. It alone had 10 percent of female graduates earning above 100,000 pounds.
On average, the best-paid graduates a decade out were medical students, with median earnings of 50,000 pounds, followed by economists, with 40,000 pounds. Those studying the creative arts did worst of all, earning no more than people who didn’t attend university.
“For most graduates, higher education leads to much better earnings,” said Anna Vignoles of Cambridge University, another of the report’s authors. “Although students need to realize that their subject choice is important in determining how much of an earnings advantage they will have.”