HL Deb 25 February 2003 vol 645 cc26-8WA
Lord Howie of Troon

asked Her Majesty's Government:

Whether they will publish the statistical information on which the proposition that in a lifetime graduates earn £400,000 more than non-graduates over the same time is based. [HL1359]

Baroness Ashton of Upholland

The information requested is shown in the following table. The comparison is between graduates with a first degree and national average earnings.



1. First degree graduates in full-time employment are estimated to earn around £400,000 more (in gross terms) than full-time employees in general over their working lives. The attached note provides the analysis behind these figures. Sensitivity analysis suggests that these figures are robust to changes in the specific quarterly Labour Force Survey data used.

Analysis of Gross Lifetime Differential

2. Table 1 shows the estimated lifetime earnings of graduates and the national average, based on gross earnings. Graduates are defined as individuals whose highest qualification is a first degree. Lifetime earnings are taken as earnings between the ages of 20 and 59. Graduates are included in the cohort to calculate average earnings. The analysis suggests that on average, graduates earn around £400,000 more than the national average.

Table 1: Estimated Gross Lifetime earnings from main job by highest qualification, full-time employees, Great Britain
First Degree National Average Graduate lifetime earnings premium (£)
All £1,075,000 £675,000 £400,000


Labour Force Survey data from autumn 2000—Summer 2001.

Additional notes on Methodology and Interpretation

3. The figures in Table 1 are rounded to the nearest £25,000 because they are based on the Labour Force Survey, which is a sample survey. Weekly earnings are usually rounded to the nearest £10.

4. The analysis is based on gross weekly average earnings for graduates and the national average, for the four quarters of the Labour Force Survey, autumn 2000 to summer 2001. The figures relate to full-time employees in Great Britain.

5. Average weekly earnings were obtained for the following age groups: 20–24; 25–29; 30–34; 35–39; 40–49; and 50–59. Information on the employment rate of graduates and the national employment rate was also obtained for the same age groups. The gross weekly earnings figures were deflated by the respective employment rates to account for the fact that not all individuals are employed at any point.

6. The deflated weekly earnings were averaged over the four quarters and grossed up to annual estimates for each age group. Since the averages relate to the age groups, they were taken as proxies for the average (deflated) annual earnings at each age in the group. Multiplying the averages by the number of years in the age group and summing across all groups provide an estimate of average lifetime earnings for graduates and the national average.

Sensitivity analysis

7. A sensitivity analysis was carried out to assess whether the estimated lifetime earnings differential changed according to the use of different quarters of LFS data. This analysis (see table 2) suggests that the lifetime earnings estimates fluctuate very little. Given this, the £400,000 figure seems to be a robust estimate.

Table 2: Sensitivity analysis of lifetime earnings estimates
Graduate lifetime earnings Graduate premium (£000)
Quarters used in LFS for earnings data Autumn 2000-Summer 2001 Quarters used Autumn 2000-Summer 2001
All four quarters £1,075,000 All four quarters £400,000
All except spring £1,075,000 All except spring £400,000
All except summer £1,075,000 All except summer £400,000
All except autumn £1,075,000 All except autumn £375,000
All except winter £1,075,000 All except winter £405,000


Labour Force Survey.

Department for Education and Skills

Analytical Services: Higher Education Division

November 2002