By Georg Graetz, London School of Economics

How much does the class of degree affect earnings in the first job?  Using exam results and class of degree from five cohorts of London School of Economics (LSE) undergraduates in combination with a survey of their income in year after they graduated we find there are significant gains from just making the grade.

Specifically:

• The average wage pay-off to a First compared with a 2:1 is pretty small – around a 3% higher expected wage.
• There is a bigger difference between a 2:1 and 2:2 – a 2:1 is worth about 7% higher wages.
• These results are driven by males: men get about 6% in higher wages from a First whereas there are no significant gains for women.
• The cash premium for getting a First for a male is about £1,780 whilst women basically get nothing

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