A graduate who grew up in deep poverty will earn 5 per cent less
– over £2,800 a year – than a more privileged peer working at the
same firm with an equivalent degree a decade after graduation,
highlighting the scarring effect of childhood poverty, according
to new research published today (Tuesday) by the Resolution
Foundation.
The long shadow – funded by the Nuffield Foundation –
uses comprehensive data which tracks the educational pathways and
earnings of over half a million graduates in England, including
35,000 who grew up in deep poverty, measured by eligibility for
Free School Meals (FSM) aged 16.
Overall, after ten years of work there is a large pay gap of 13
per cent (£7,590 per year) between graduates who grew up in deep
poverty and those who did not.
These poorer graduates are already underrepresented at
university, with only 16 per cent obtaining a university degree
compared to 32 per cent of those from more affluent families. But
while a degree remains a valuable asset – at age 31 graduates
overall earn almost 50 per cent more a year (£18,700) than
non-graduates – the report finds that the long shadow of
childhood poverty is hard to escape, even for those who overcame
the hurdles of making it to graduation.
Students from poor families are less likely to attend the most
selective universities – 15 per cent compared to 29 per cent of
more affluent graduates – and are less likely to receive
First-class and Upper Second-class honours – 36 per cent compared
to 44 per cent.
All told, even when comparing graduates who were course mates and
got the same degree, a 7 per (£3,800) cent gap in earnings 10
years after graduation remains. This reduction in the earnings
gap – from 13 per cent to 7 per cent – shows that were access to
and performance at university more similar between poor and more
affluent graduates, disadvantaged young people would face a much
smaller, though still significant, penalty.
There are also differences in where people work and who they work
for. But even once educational outcomes and employer choice are
accounted for, the authors still find a five per cent deep
poverty gap in earnings a decade later – equivalent to £2,800 a
year.
This as-yet unaccounted for pay penalty – where two work
colleagues sitting next to each other with the same degrees and
same level of experience could earn different amounts due to one
experiencing poverty in childhood – highlights the enduring scars
left by deprivation in early life.
Further research is needed to fully account for the diminished
earnings prospects faced by graduates who experience childhood
hardship. But the Foundation notes that given the long-term pay
penalty, action to reduce child poverty is needed, as is action
to reduce the educational disadvantage – starting at school and
continuing at university – that poorer children suffer.
Julia Diniz, Economist at the Resolution Foundation,
said:
“University has long been seen as a way out of poverty and up the
income ladder. But while getting a degree offers everyone a big
boost in earnings, graduates who grew up in deep poverty struggle
to fully catch up with their more affluent peers.
“What degree you get continues to impact on your earnings a
decade into your career, but poorer students are less likely to
gain access to the best universities and get the best grades. And
even when they do get the same degree and work at the same firm
as more privileged graduates, they still earn thousands of pounds
a year less.
“Understanding why the long shadow of childhood deprivation
remains so hard to escape is the first step. But we can't stop
here: no young person should be penalised by poverty, and poorer
graduates who have already overcome the odds should be able to
reap the rewards of their hard work.”
Notes to Editors
- Eligibility for FSM was far more restricted in the 1980s and
1990s compared to today, and is therefore a good proxy for deep
poverty. In the late 1980s, just one-in-eight 16-year-olds were
eligible, compared to around one-in-four today.
- Embargoed copies of The long shadow: How
childhood disadvantage depresses the earnings of university
graduates in England by Julia Diniz, Richmond Egyei, Anna
Stansbury & Gregory Thwaites are now available from the press
office. For more information contact Angelica Ottaway on 020 3372
2955.
- The Nuffield Foundation is an independent charitable trust
with a mission to advance social well-being. It funds research
that informs social policy, primarily in Education, Welfare, and
Justice. The Nuffield Foundation is the founder and co-funder of
the Nuffield Council on Bioethics, the Ada Lovelace Institute and
the Nuffield Family Justice Observatory. The Foundation has
funded this project, but the views expressed are those of the
authors and not necessarily the Foundation.
