Tuesday, July 17, 2018 | ePaper

Women with degrees earn more

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Elizabeth Koprowski :
The Gender Pay Gap (GPG) is a hot-button issue in 2015. Wage equality has been the platform for presidential campaigns, Oscar acceptance speeches, and humorous internet videos. There is a fierce debate surrounding the causes and impacts of the GPG, but the reality is that in 2015 women all over the world still earn less than men. It's no surprise that a  recent study conducted by the Institute for Fiscal Studies (IFS), Harvard University, and the University of Cambridge confirmed that women in England earn less than men. However, the study also yielded interesting information about graduates with some positive implications for women.
According to the study, female graduates in England still earn less than their male counterparts but they earn, predictably, more than women without degrees. That in itself is not particularly astonishing, but what is unexpected is the rate at which earning potential increases for women with degrees. The study found that male graduates earned approximately two times more than men without degrees, while female graduates earned three times more than those without. For instance, the median income for a man with a degree was found to be £25,200, whereas the median income for a man without a degree stands at only £10,700. In comparison, the same figures for women with and without degrees was £19,500 and £6,300, respectively. Researchers involved in the study compared statistics from tax records and student loan information to track the earning potential of 260,000 people ten years after graduation. Overall, the study indicated that both men and women had greater earning potential with a degree and that while the recent economic crises have negatively impacted workers in their 20s and 30s the most, those with degrees fared better than those without.
As well as indicating that university degrees improve the earning potential of women, the study also suggested that education helps to close the GPG. The statistics still indicate that men with degrees earn more than women with degrees. For example, the study showed that after ten years, 10% of women were earning £43,000 per year compared with 10% of men who earned £55,000. However, the study found that the GPG between men and women with degrees was only 23%, whereas the overall GPG in England estimated by a Labour Force Survey stands at around 33%. Nevertheless, women graduates still suffered more economically during the recent recessions than their male counterparts, regardless of education.
Still, those who participated in the research maintain that the statistics set forth by the study indicate a strong correlation between education and higher earning potential, particularly for women. Jack Britton, a researcher with the IFS, argued that the study demonstrated that university degrees can provide "protection from low income" as well as some resistance to the negative effects of the recessions. Britton also stressed that the study showed that the protective qualities of a university degree were "particularly true for women."
The study did not set out to confirm the GPG, nor did it intend to find that women fared better when they held degrees. Instead, the researchers involved in the study focused on the potential of using 'big data.' This study, which was the first of its kind to be applied to graduate earning potential in the UK, aimed at gaining a more reliable overview.
The study's surprising results indicate that the 'big data' approach is an effective means of examining the subject. In the past, earning potential has been studied using smaller surveys that relied on accurate self-reporting. Such surveys can be flawed by participants who inaccurately report income, as well as other biases.
Furthermore, the IFS study used anonymised administrative data from the Student Loans Company (SLC), a non-profit, government-owned educational loan provider in the UK, to track graduate earnings between 1998 and 2011.  SLC provided 85% of English students with loans during this period, and researchers believe that the remaining 15% of students likely had even higher earning potential than those included in the study. Therefore, the researchers suspect that the study may even underestimate the earning potential of graduates.
The study is good news for students earning degrees, especially for women. However, the study did confirm that despite a degree, women earn less than men.
In fact, while women with degrees outperform women without in earning potential, the study also indicated that the top earning potential for women with degrees was still significantly lower than for men.
According to the study, ten years after graduation 1% of men were earning more than £148,000. Ten years after graduation, that same 1% of women were only earning more than £89,000. The IFS study may have confirmed that the GPG has yet to close, but it has also demonstrated that individuals can increase their earning potential, regardless of gender, by earning a degree.

(Elizabeth Koprowski is an American writer and travel historian. She has worked in the higher education system with international students both in Europe and in the USA).

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