How graduate salaries vary by degree subject

Subject choice has a clear impact not only on graduate salaries but also on the gender pay gap - although it's important to remember that financial rewards aren't the only measure of success

With the expansion of higher education in the last two decades, graduate salaries - particularly the difference between graduate and non-graduate pay in the UK - have become a popular topic of conversation.

Many have questioned whether the graduate premium has fallen as we've seen student numbers continue to increase. And although there is research suggesting that the graduate premium has declined moderately in recent years,1 there is strong evidence 'that there are substantial positive financial returns to a degree'.2

However, researchers have also found sizeable variations in earnings between graduates, with some graduates seeing much larger financial returns than their counterparts. For instance, there are significant differences in returns by subject, with evidence repeatedly showing that a degree in Medicine and Dentistry or Economics is likely to attract much higher pay than a degree in the Humanities or Creative arts.3

This difference in financial returns by subject will be the focus of this article. Using Graduate Outcomes data for the 2021/22 cohort, we look at these differences while also briefly examining the relationship between the difference in pay between male and female first-degree graduates and subject choice.

Graduate salaries by subject

,No significant furter study,With significant further study
Medicine and dentistry,38057,37756
Economics,35624,34222
Electrical and electronic engineering,34737,33297
Maths,33007,33229
Physics ,32408,30009
Civil engineering ,32401,30760
Mechanical engineering,31548,31651
Business and management,30285,30316
IT ,29937,
Chemistry ,28860,29168
Politics,28792,28404
Finance and accountancy,28737,29394
Languages,28273,27082
Hospitality,27384,28467
Geography,27778,28756
Marketing,26958,25789
Physical and geological sciences,26727,28726
History,26702,27378
Architecture and building ,26606,26755
Law,26306,28621
Sociology,25989,29957
English,25937,26677
Biology ,25878,26539
Psychology ,25286,25437
Sports science,24765,26382
Design,24711,26850
Media studies,24248,24382
Cinematics and photography ,23629,28190
Performing arts ,23115,26114
Fine arts,22460,26892

As in previous research, Medicine and Dentistry graduates reported higher earnings than any other graduates within this cohort by some margin 15 months after graduation, with Medicine and Dentistry graduates in full-time UK employment, who have partaken in no significant further study after graduation, earning upward of £38,000 a year on average. This is followed by Economics graduates who reported average earnings of £35,625 when surveyed.

Conversely, Creative arts degrees were associated with the lowest average returns among this cohort with Cinematics and Photography, Art, Design and Performing arts graduates all among the lowest earners on average.

Looking at the data above, these differences in average pay by subject are clear but the causes for these differences are not as obvious. Research suggests that a sizable proportion of these earnings differences can be explained by prior attainment and differences in background characteristics (i.e. ethnicity, socio-economic status, school type etc.). Higher-earning subjects 'typically take students with higher prior attainment and from higher socio-economic backgrounds who would have gone on to have higher earnings anyway'. However, even after controlling for these differences, the impact of degree choice on graduate earnings is still significant.4

The impact of subject choice on the gender pay gap

,No significant further study ,With significant further study 
Female,27609,27670
Male,30346,29755

For the 2017/18 graduate cohort, Graduate Outcomes data conveyed a 10% difference in earnings between male and female graduates, with male graduates reporting higher earnings than their female counterparts. Moreover, the 2021 Graduate Outcomes survey (pertaining to 2018/19 graduates) found that three fifths (61%) of females were earning salaries below £27,000, compared with 48% of males 15 months after graduation.5

Data from the 2022 Graduate Outcomes survey painted a similar picture, with male graduates out-earning their female counterparts by £2,087, on average, 15 months after graduating. Albeit, the difference in average earnings between male and female graduates in this cohort (2019/20) was 6% smaller than that of the previous one. To add, 58% of females were earning salaries below £27,000 compared with 45% males.

Last year’s data (pertaining to 2020/21 graduates) conveyed more of the same, with male graduates still earning 10% (£2,000) more than their female counterparts when surveyed. However, female graduates in this cohort were less likely than those in the previous one to report that they were earning salaries below £27,000, with 52% of female graduates reporting this, compared to 39% of male graduates.

In the most recent survey male graduates reported average earnings £1,500 higher than their female counterparts. Nevertheless, we see a significant decrease in the proportion of both male and female graduates reporting earnings below £27,000, with 38% of female graduates reporting this, compared to 30% of male graduates.

And while the income of female graduates increases with time after graduation, it increases for male graduates at a much more rapid pace. There are factors other than subject choice (e.g. childbearing, the propensity to settle for less pay etc.) which contribute to these unequal returns for male and female graduates in the years following graduation. Nonetheless, for the purpose of this article we will only touch on the impact that subject choice has on the difference in early career earnings between male and female graduates.

Typically, women are more likely to enrol onto courses associated with lower financial returns. For instance, the humanities, associated with lower earning potential than STEM subjects, are dominated by women, who made up 63% of all graduates in these subjects in 2021/22. Similarly, 62% of creative arts graduates reported that they were female. On the other hand, just over a fifth (22%) of technology, engineering and maths graduates in this cohort identified as female. Looking at the salary data above, we can infer that this tendency to enrol onto university courses associated with lower earning potential contributes to the gap in earnings that we see between male and female graduates 15 months after graduation.

Does it really matter?

Focusing on the value of a degree in financial terms is certainly useful, as university applicants want to know about their labour market prospects when choosing a degree. Notwithstanding, higher education can also be valuable for its contribution to the personal development of those who pursue it.6

Just 2% of Graduate Outcomes respondents working within the UK said that the main reason for taking their job was because it pays well, suggesting that high pay isn't always the most crucial factor when planning their career. If we focus on the example of performance arts graduates, we find that looking at measures which solely focus on salary misses much of what is important to them. Research suggests that Performance arts graduates not only tend to be 'strongly engaged with their degree discipline', but most are happy with their work-life balance and believe that they are able to contribute to their artform and their community.

Moreover, when asked if their job is meaningful, the vast majority (78%) agreed - suggesting that many Performance arts graduates pursue meaningful careers despite being among the lowest paid graduates. Similarly, the majority of respondents who graduated from courses associated with lower returns also agreed that their jobs are meaningful. Nevertheless, 14% of these graduates suggested that they are working in roles that they do not feel are meaningful.

On the other hand, the overwhelming majority of those who graduated from courses associated with higher returns indicated that they are working within meaningful roles. For instance, 97% of Medicine and Dentistry graduates and 89% of Electrical and Electronic Engineering graduates agreed that their work is meaningful.

Likewise, when asked if they are utilising their skills at work, those who graduated from subjects associated with higher returns were more likely to answer affirmatively - Dentistry (96%) and Electrical and Electronic Engineering (66%) graduates were more likely to report this than Physics (52%), Maths (52%) and Economics (50%) graduates.

Interestingly, in some cases, those who graduated from courses associated with lower returns were just as likely to agree that they were utilising their skills in their current jobs as those who graduated from courses associated with higher returns. For instance, 60% of Design graduates and 56% of Performing arts graduates indicated that they are making use of the skills that they acquired from university.

Therefore, when evaluating the value of a university degree, it is important to remember that financial returns are not the only factor that should be considered. Most university graduates find meaningful jobs that require them to use the skills that they acquired at university 15 months after graduation.

Notes:

1. New research shows reduction in the ‘graduate premium’, HESA, 2019.
2. Returns to a degree, House of Commons, 2019.
3. The relative labour market returns to different degrees, Institute for Fiscal Studies, 2018.
4. Ibid.
5. Higher Education Graduate Outcomes Statistics: UK, 2018/19 - Salary and location of graduates in work, HESA, 2021.
6. How should we respond to reports of a declining graduate premium?, HEPI, 2018.

Written by

Micha-Shannon Smith

Assistant information analyst

Prospects