Source: Alamy

Financial results: 2:1=?more money

Graduates who scrape upper second-class degrees earn over ?2,000 a year more in their first jobs than those who narrowly miss out on what is now a must-have for many employers.

Researchers at the London School of Economics have found that graduates who just manage to achieve a 2:1 earn 7 per cent more on average than those who fall short by a single mark.

While the long-term impact on graduate income is not yet known, if the initial earning gap persists it could mean graduates with low 2:1s earn an estimated ?81,000 more over a 40-year working lifetime than those with high 2:2s.

The study comes at a time of heightened concern about the fairness of the UK¡¯s degree-classification system.

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Critics argue that a US-style grade-point average (GPA) scheme is required to smooth the ¡°cliff edges¡± between UK classifications that can harm the long-term employment prospects of those falling short of 2:1s by a few marks.

The study into the ¡°2:1 effect¡± was carried out by Andy Feng and Georg Graetz, two PhD students at the LSE¡¯s Centre for Economic Performance, who analysed the marks and future earnings of graduates leaving the school between 2005 and 2010.

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To see if the final classification made a difference to students of similar academic ability, they looked at the salaries of graduates whose marks were just above the 2:1 threshold compared with those who were just below.

Since the critical threshold for a 2:1 is achieving 60 per cent in at least four papers out of nine, they focused on the mark of the fourth-highest exam.

Those scoring 60 per cent in their fourth paper should get a 2:1, while those with 59 per cent should only get a 2:2.

Six months after graduation, the pay-off for achieving a 2:1 was already substantial, said Mr Feng, even when students entering the finance industry, which has atypical salaries, were excluded.

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¡°These higher salaries were caused by the 2:1 effect and nothing else,¡± he said.

¡°These were students who were broadly [at] the same academic level and it was just a matter of what side of the threshold they fell.¡±

There is also a small earnings premium for graduates who narrowly score first-class degrees, the study says.

They earn about 3 per cent (?1,000 a year) more than students who have to settle for high 2:1s.

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However, men are more successful in exploiting their first-class degrees to gain higher-paid jobs than women.

Male graduates pick up about 6 per cent in higher wages - ?1,800 a year - from firsts, but women receive nothing. Over a 40-year career, such an earnings premium could be worth about ?71,000, the researchers estimate.

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The ÖйúAƬ Academy is currently consulting with universities to see if there is an appetite for a GPA classification system, while most institutions are introducing the ÖйúAƬ Achievement Report to reflect wider student accomplishment.

jack.grove@tsleducation.com