Good grades usually pay more than the university reputation in the U.K.

A study shows that good grades for most students graduating in the United Kingdom are usually more important than the reputation of the university for higher revenue in the following years.

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A study carried out by the Institute for Fiscal Studies (IFS) and published on April 20 shows that getting good grades at British universities is often more important than the reputation of the institution. However, the highest honors in top schools reward a big payoff, but for men mostly.

Graduates with first or upper second class (2.1) honors in England earned more money by the age of 30 than those with lower second class (2.2 or below) degrees. This occurred regardless of the university students went to, suggesting that grades actually matter more than the reputation of a university.

Earning a degree in U.K. universities with first class honors means that grades, given as a percentage, reach a weighted average usually higher than 70%. About 20% of students get a higher average than 70%, a proportion that is growing over time as the share of people getting first class degrees more than trebled between the 1999 and 2015 graduating cohorts. Second class honors would be typically in 60-69% (2.1 class degree) and 50-59% (2.2).

And even if elite universities tend to give more good grades, research found that it was less difficult to get better grades outside these institutions.

Commissioned by the department of Education, the authors linked university records from the U.K., British tax records and school records of everyone who took General Certificates of Secondary Education, the end-of-high-school exam, in England (not the entire U.K.) since 2002.

Ben Waltmann, senior economist at the IFS and co-author of the paper urged prospective students to take notice of the results and to be “more relaxed” about which schools they want to attend in light of the study’s conclusions. “The results show that degree categorization may matter as much as university attendance for later-life earnings,” Mr. Waltmann told The Guardian.

Those with the best grades tend to enroll in postgraduate studies. But salary differences are even more important when postgraduates are excluded from the study, which shows that good undergraduate grades are all the more rewarding if students don’t continue afterward. Authors also suggest a postgraduate degree may be less valuable for those who already have good knowledge of their field or that postgraduate degrees don’t really pay off before 30 years old.

The study also found that salary differences according to grades varied hugely depending on the field.

For many topics, the difference between a first and a 2.1 is insignificant for earnings,” said Jack Britton, associate director of the IFS and co-author of the paper. Majoring in English or education and not having the best grades may not result in better or lower pay. However, for other fields like economics, law, business, computing and pharmacology, a first class honor degree (above 70%) can lead to substantial salary differences, close to 15% compared to a 2.1 (above 60%).

All in all, those who earned at least a 2.1 get a substantially greater salary than those who didn’t meet this threshold, which materializes with a £ 3,800 difference ($4,600) in median annual pre-tax earnings five years after graduation. As a consequence, “many graduates who get a 2.2 from a highly selective university might have got a higher-paying job had they attended a slightly less selective university and got a 2.1.”

Moreover, the results of the study suggest someone needs to get at least a 2.1 to access highly paid jobs, except in medicine, a field that doesn’t usually reward a better degree classification.

Getting good grades seems all the more important in top universities because achieving at least a 2.1 has a much bigger payoff at more selective universities. Someone who got a 2.1 degree (60-69%) from a university like Oxford, Cambridge, Imperial College London, or the London School of Economics will earn 20% more on average than someone from the same school who got a 2.2 degree (50-59%) at age 30.

So this reinforces the idea that selective universities can be highly rewarding, but students need to get the highest honors.

The latter nevertheless shows “stark gender differences” in top universities as the average payoff to a first class degree versus a 2.1 is near zero for women, but very large at around 14% for men.

For the authors, the graduate gender pay gap was largely explained by subject choice. But among male and female graduates from the same subject, a pay gap emerged by the age of 30, the child penalty, which is a “key explanation” even though children are not “the only thing going on here”.

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