Impact of degree classification on early career outcomes

What can Graduate Outcomes data tell us about whether a student leaving university with a First Class degree has any advantage over their peers?

The proportion of students graduating from English universities with First Class Honours has more than doubled over the last decade. Prompting many to question the validity of these grades, with some suggesting that this threatens to undermine the value of UK degrees.1

Moreover, many have made claims that employers no longer value a First Class degree as they once did, asserting that employers are becoming reluctant to appoint graduates on this basis.2 However, the available data illustrates a different picture. Research has repeatedly shown that graduates who leave university with higher degree classifications enjoy better employment prospects and are more likely to pursue further study than their peers.3

Drawing on Graduate Outcomes data, this article examines the outcomes of UK-domiciled, first-degree graduates who achieved First Class Honours 15 months after graduation and compares them with the outcomes of their peers.

Positive correlation between degree classification and employment rates

Degree classification,Rate of full-time employment,Rate of part-time employment,Rate of unemployment
First class honours ,58.0,10.8,4.7
Upper second class honours ,55.1,12.4,6.5
Lower second class honours ,52.6,14.3,8.4
Third class honours/Pass ,53.7,13.9,9.5

First-degree graduates who achieved First Class Honours were more likely than others to be in full-time UK employment 15 months after graduation. In fact, they consistently achieved better outcomes across all measures.

They were not only less likely to be unemployed, but also more likely to pursue further study - 19.0% were either studying full time (11.1%) or combining work and study (7.9%), compared to 17.5% of those with a 2:1, 14.6% of those with a 2:2 and 10.3% with a Third.

Additionally, 80.1% of First Class graduates were in professional-level roles, significantly higher than the 69.0% of 2:1 graduates and 60.6% of those with a 2:2.

,First class honours,Upper second class honours,Lower second class honours,Third class honours
Overall,80.1,69.0,60.6,62.4
With a disability,77.0,66.6,60.5,59.2
Ethnic minority,80.1,68.8,58.9,61.7
Male,84.1,71.7,59.7,58.4
Female,77.5,67.2,61.1,66.3

This pattern is true across all groups. For instance, disabled graduates (77.0%) who achieved First Class Honours were more likely to find professional-level employment than those with a 2:1 (66.6%) or 2:2 (60.5%). The trend is similar for graduates from an ethnic minority background: 80.1% of those with a First Class degree were in professional-level employment 15 months after graduation, compared to 68.8% of those with a 2:1 and 58.9% of those with a 2:2.

Degree classification and earnings

Research from the Institute of Fiscal Studies (IFS) explores the earnings differences between graduates who left university with different degree classifications five years after graduating.4

Unsurprisingly, they found that the earnings differences between those graduating with different degrees are large. Five years after graduation, median annual pre-tax earnings for both women and men who obtained a lower Second Class degree in 2013 were around £3,800 lower than for those who received an upper Second Class degree.

Furthermore, women who obtained First Class degrees earned around £2,200 (8%) more than women with upper Second Class degrees, while men with First Class degrees earned £4,100 (14%) more than men who obtained upper Second Class degrees.

They also discovered that a lower Second Class degree is associated with 6.9% lower earnings compared with an upper Second for women and 10.9% lower earnings for men. Similarly, obtaining a Third Class degree was associated with 14.7% lower earnings for women and 18.3% lower earnings for men when compared with an upper Second.

Even after controlling for background characteristics (e.g. prior school attainment, ethnicity, school type etc.), earnings differences between degree classes are substantial for both women and men. Conditional on observable characteristics, the premium of gaining a First Class degree over an upper second is 3.5% for women and 7.0% for men.

Top grades remain a strong predictor of early career success

Quantifying outcome differences by degree classification sheds light on whether universities are equipping students with skills that are useful in the labour market. If the skills that students learn at university and those required in the labour market are aligned, we would expect to see better outcomes for graduates leaving university with higher class degrees.5

Interestingly, Graduate Outcomes data reveals that graduates who achieved First Class Honours (70.2%) were more likely than others to say that they were utilising their degree skills at work. This compared to 60.1% of those with a 2:1 and 56.4% of those with a 2:2.

Despite persistent concerns about grade inflation and the perceived devaluation of First Class Honours, the evidence remains compelling: graduates with higher degree classifications continue to enjoy clear advantages in the labour market.

These findings highlight the enduring value of academic achievement and suggest that, for now, top grades remain a meaningful signal to employers and a strong predictor of early career success. As the graduate labour market evolves, it is essential for universities to maintain rigorous standards and ensure that degree classifications continue to reflect genuine skills and achievement.

Notes:

1. First-class degrees more than double in a decade, BBC, 2022.
2. Five key takeaways from Graduate Outcomes 2019/20, Luminate, 2022.
3. Degree classification and recent graduates’ ability: Is there any signalling effect?, Di Pietro, 2016.
4. How much does it pay to get good grades at university?, Institute of Fiscal Studies, 2022.
5. Ibid.

Written by

Micha-Shannon Smith

Information analyst

Prospects Luminate