Graduates from disadvantaged homes who get a degree end up earning thousands of pounds less than middle-class graduates, a new study has found. 

The typical 25-year-old London graduate with a deprived background earns £1664 less each year than a graduate of the same age who grew up in one of that capital’s wealthiest homes.

The figures were calculated by the Social Market Foundation think-tank, which said its findings showed that low-income graduates face significant disadvantages even when they achieve educational success. The think-tank analysed earnings data for graduates from London.

The SMF said the findings were a challenge to all parties in the general election to deliver policies that will allow youngsters from low-income homes to compete fairly in the jobs market with better-off peers.

Disadvantaged young people do exceptionally well in London’s education system up until the age of 16, and London does exceptionally well at sending students from disadvantaged backgrounds to university.

But the SMF found they can struggle in the graduate jobs market, sometimes because they lack the social connections and work experience needed to get higher-paid jobs, and sometimes because recruiters’ hiring practices are slanted against them.

In a report supported by Trust for London, the SMF said those factors create a “class ceiling” that is keeping graduates with deprived backgrounds out of the highest-earning jobs.

The wage gap between a top earning middle class graduate and a high-flying graduate from a poor home is £7904, the think-tank calculated. 

The report also found that some graduates from poor London homes lack the “soft-skills” and self-confidence to seek out the highest-paying roles.

Other obstacles that stop disadvantaged graduates doing better include choosing courses and qualifications associated with lower wages, because of poor careers guidance and advice.  The need to do paid work while at university can also limit their access to internships and other schemes offering experience that can help secure a high-paid job.

Kathryn Petrie, Chief Economist of the SMF said:

“London’s schools are great for children from deprived homes and lots of them go on to university. But even though they do well in education, people from low-income homes still face real disadvantage when it comes to getting a job and earning.
“The sad fact is that working hard and doing well at school and university isn’t enough for disadvantaged graduates to catch up with their peers from wealthy homes – their socio-economic background means they face obstacles that better-off people don’t have to deal with.”

James Kirkup, SMF Director, said:

“Any politician who promises more social mobility or more social justice needs to accept that education is only part of the story here. This study shows that even when children from disadvantaged homes do well at school and university, they’re still at a disadvantage relative to their middle-class peers. 

“Social mobility and a fairer economy is about much more than better schools. Employers and families must be centrally involved too.”

The SMF report, titled The Next London Challenge, was sponsored by Trust for London. Data analysis has been conducted using the Next Steps Survey. Full data citation: University College London, UCL Institute of Education, Centre for Longitudinal Studies. (2018). Next Steps: Sweeps 1-8, 2004-2016: Secure Access. [data collection]. 4th Edition. UK Data Service. SN: 7104, http://doi.org/10.5255/UKDA-SN-7104-4

 

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