How exam grades affect income over a lifetime
How exam grades affect income over a lifetime
Across the nation, school pupils and leavers are celebrating a government U-turn over their grades. But what they have achieved is more than just appropriate results.
In fact, A-Levels, BTecs and GCSEs can have a lifelong impact on the earning potential of candidates. Those who had initially been marked down risked suffering a lifelong financial penalty as a result.
Of course, exam results don’t define or limit success. Individuals can always beat the trends, and no young person reading this should feel that lower-than-expected grades mean they have no financial prospects.
But there are trends, and those trends demonstrate there is typically a huge financial significance to grades.
The value of grades
Research carried out by the Department for Education back in 2015 shows the impact that grades can have.
It revealed that achieving five A* to C GCSE grades, including English and maths subjects, adds £80,000 to a student’s earnings over their lifetime.
Then a further £60,000 is added to their wages if they go on to achieve at least two A-levels.
However, in a tough jobs market, employers may look for more tangible evidence of ability.
Sam Hyams, the co-founder of the virtual early career network Springpod, says: “Employers are and will remain interested in a students’ grades as one measure of their suitability for the job.
“However, what is becoming more apparent, is that today’s students are engaging earlier with the world of work, through work experience placements, making connections, ambassador interactions and careers broadcasts. Employers will do well to take into account this sort of demonstration of commitment alongside grades as these students look to enter the world of work.”
Students who lose out on a place at university risk losing more than three years of education. A degree boosts women’s lifetime earnings by £100,000 and men’s by £130,000 after student loan payments and taxes are factored in, according to a 2020 study commissioned by the Department for Education and carried out by the Institute for Fiscal Studies.
In fact, graduates will typically earn 20 per cent more over their working lives than non-graduates.
Of course, not all degrees are equal when it comes to boosting future earning potential. Yet they can still hold real value to the individual student and to society – many degrees that do not necessarily result in vastly higher earnings, such as nursing or education, hold an undeniable value to society.
The analysis found that the financial gains of a creative arts or languages degree are “close to zero” for women, while men who study creative arts subjects will be set to lose £100,000 compared with men who did not go to uni.
It also revealed that more selective universities typically resulted in graduates who could command higher salaries.
That is another issue for students just now; some have missed out on places at top universities because of this grading fiasco.
The Russell Group return
Many students who were initially downgraded may now have missed out on their places at the UK’s top universities and had to settle for less prestigious institutions through clearing.
That doesn’t mean their education or university experience won’t be equally valuable. But it may still affect their future.
Research carried out by Milkround, a student and graduate jobs website, found that four out of five graduates believe that university graduates from Russell Group institutions will be favoured when it comes to applying for graduate roles.
Kate Palmer, the associate director at global HR and employment law consultancy Peninsula, says that some companies are undeniably swayed by the cachet of a top university.
She says: “There is a certain level of prestige attached to a Russell Group university that may be attractive for employers, with the suggestion that it is more difficult to both gain a place and achieve a top grade in these specific institutions.
“However, it is essential to remember that whether these universities are the ‘best’ the country has to offer is disputed; achieving a first-class degree from a non-group member could be just as indicative of the quality of a candidate as if they do this within the group.”
Despite the U-turn, some students will still not have achieved the grades they had hoped for. But even then, there are other options for satisfying careers and also for high-earning careers.
Ben Keighley, the director and co-founder of Socially Recruited, says: “If you haven’t got the grades that you were hoping for, don’t worry – there are many options available out there for you.
“Past government data has shown that better exam grades correlate with higher future earnings, but that being said, many successful people received low or even no grades when they were younger.
“It can also really depend on the industry, as doctors and lawyers understandably require certain degrees and qualifications, whereas someone, for example, in sales or who has started their own business might have unlimited earning potential.
“However, if it’s earning potential that you’re looking for, then we would suggest starting by looking at skills with high earning potential, many of which can be self-taught or learnt online. A great example of this is coding where the average salary in this industry is well above the national average.”