Graduate salary premium ‘narrowing’, BIS report suggests

The median graduate salary in England stood at £31,000 during the third quarter of 2014, down £1,000 year-on-year, the Department for Business, Innovation and Skills says.

The average non-graduate salary was unchanged at £22,000, according to the department’s first ever paper on graduate labour market statistics.

Workers with postgraduate degrees attracted an additional premium, with median gross earnings of £40,000. This was up £1,500 on the same time last year.

The report also shows that graduates and postgraduates have better employment prospects than non-graduates. Among the working age population, 87 per cent of graduates and postgraduates are in work, compared with 70 per cent of non-graduates.

Employment rates for all groups were up year-on-year, with graduates seeing a 1.7 per cent improvement over that period.

The report reveals that 68 per cent of graduates were working in graduate-level jobs, up 2.4 per cent on last year. This compares with 78 per cent of postgraduates, and 22 per cent of non-graduates.

Unemployment rates among the working age population for postgraduates, graduates and non-graduates stood at 2.5 per cent, 3.5 per cent and 7.4 per cent respectively, the report says. All of these measures were down year-on-year.

Greg Clark, the universities and science minister, claimed the figures demonstrated that going to university was a “great investment”.

“There are clear benefits to graduates and to the country from higher earnings and high levels of employment,” he said. “This is particularly true for postgraduates, which is one reason why the government announced last week that the student loans system will be extended to people studying master’s degrees.”

The report also gives data for the population aged between 21 and 30. In this group, the average graduate salary was £24,500, compared with £28,000 for postgraduates and £18,500 for non-graduates. The report says that the smaller uplifts reflect the shorter time that graduates and postgraduates will have spent in the labour market.

The average employment rate for graduates in this age group was 87 per cent, compared with 85 per cent for postgraduates and 71 per cent for non-graduates.

Only 58 per cent of graduates aged under 30 were in graduate-level jobs, compared with 72 per cent of postgraduates and 17 per cent of non-graduates.

The unemployment rates for young postgraduates, graduates and non-graduates were 4.7 per cent, 5.7 per cent and 9.8 per cent respectively.

chris.havergal@tesglobal.com