The rewards for getting a good degree

The rewards for getting a good degree. Does an individual's educational achievement at university affect their pay later in life? Looking at evidence on degree classes and UK graduate earnings during the expansion of higher education, Sussex economist Dr Shqiponja Telhaj and colleagues at the University of Warwick find that it pays to study hard: there is a significant hourly wage premium for getting a first or upper second. Since the early 1960s, with developments in the field of human capital research, analysis of the returns to education has established robust evidence of a strong positive association between earnings and years of schooling or level of qualification attained. But there has been little analysis of how returns vary according to the level of academic performance - for example, what US universities measure as students' 'grade point average' - conditional on the level of qualification. This is particularly surprising given that employers often recruit at specific educational levels and, when ranking candidates, they are likely to consider grades or marks achieved. For example, according to a 2010 report from the Association of Graduate Recruiters, 78% of employers filter out applicants who have not achieved at least an upper second. Our research investigates whether there is a premium associated with the level of educational achievement at university for graduates in the UK, as measured by the class of degree awarded: first, upper second, lower second or third.