Study: Rich kids get higher salaries

CAMBRIDGE, England, April 13 (UPI) — New research suggests we still aren’t a true meritocracy. According a new study, a graduate’s socioeconomic background has a measurable effect on salary just out of college.

Scientists at Cambridge University and Harvard University looked at the relationships among the earnings of recent grads and their background, degree and university.

Not surprisingly, those who earned degrees in medicine and economics tended to make significantly more money than those with other degrees. And students with degrees from more highly regarded higher learning institutions earned more on average than those with less prestigious degrees.

But if the goal is a higher paycheck, the new study proves it helps to have wealthy parents.

All things being equal — same degree, same institution — students whose parents are in the upper income brackets tend to earn a higher salary ten years out of college than do their less wealthy peers.

The researchers analyzed anonymous tax records and student loan records for 260,000 students who began university between 1998 and 2011, observing their earnings for up to ten years. The study looks specifically at tax year 2012-13.

Researchers defined wealthy students as those with parents earning in the top 20 percent. The bottom 80 percent were defined as the less fortunate.

Ten years after graduation, men from families in the top 20 percent were earning $11,000 per year more than those from the bottom 80 percent. For women, the gap was $7,500.

“The research illustrates strongly that for most graduates higher, education leads to much better earnings than those earned by non-graduates, although students need to realise that their subject choice is important in determining how much of an earnings advantage they will have,” lead researcher Anna Vignoles, from Cambridge’s Faculty of Education, said in a news release.

Vignoles and her colleagues plan to build on the study to better understand how education policies, funding and course advisors might be able to shrink the earnings gap between high-income and low-income students.

The study was published this week by Institute for Fiscal Studies.

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