How private schooling is deciding the millionaires of tomorrow

The Telegraph, 30/10/14, a study by the Institute for Fiscal Studies calculates that graduates who attended an independent school earn 7pc more than their colleagues even if they went to the same university and do the same job.

Sending children to private school could set them up to earn dramatically higher salaries than their peers, even if they end up with identical university degrees and doing the same jobs, a study by a leading economic think-tank concludes.

Research published by the Institute for Fiscal Studies (IFS) calculates that graduates who attended independent schools earn almost seven per cent more on average than colleagues with similar qualifications but who were educated in the state sector.

It concludes that the secret of the success of Britain’s public school elite could lie in other ingredients of their education, such as self-confidence and ambition, rather than pure academic results.

Crucially, it calls into question the idea that universities, including elite institutions, apply a levelling effect, reducing the inequality in the English school system.

Dr Claire Crawford, an economist at Warwick University and IFS research fellow, and Prof Anna Vignoles of Cambridge, analysed figures from a sample of 75,000 British graduates who completed their degrees in 2007, to assess whether their salaries reflected a “private school premium”.

They found that a gap in earnings opened up within months of graduation and after three and a half years those from private schools were already being paid more than 17 per cent more than those educated in the state sector. Those from private schools were earning just under £29,000 on average, more than £4,500 more than those from state schools.

But even when the findings were adjusted to account for factors which could boost their earning power, such as attending a more prestigious university or taking a degree likely to lead to a better paid job, there was still a gap of 6.7 per cent, or around £1,500 in pay between the two groups.

The study concludes that the difference cannot be explained simply by the fact those from independent schools may be more likely to set their sights on a top university followed by a careers in more traditionally well-paid fields such as banking or the law.

“So what is the explanation for this apparent private school effect?” the study asks.

“One possible explanation is that the variable indicating whether the student attended a private school is a proxy for some unobserved characteristic of the student that is correlated with earnings.

“Such unobserved characteristics may include ability, social skills, determination or indeed a range of other skills not properly measured in our model.”

It notes that schools could influence students’ choice of subject or career path, and in turn their earning power.

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