Schoolgirls told to study economics for better pay

Schoolgirls should be told that studying economics will lead to higher paid jobs in a bid to tackle the gender pay gap, experts said on Tuesday.

It comes as analysis from the Institute for Fiscal Studies found the gender pay gap opens up immediately after graduation with male graduates earning five per cent more than females on average at age 25 — despite women being more likely to get a first class degree or a 2:1 than men.

Researchers said most of this initial gap can be explained by the subjects graduates choose at university, with women less likely to study courses that lead to the highest paying jobs.

They said women make up just a third of graduates in economics, the subject with the highest financial returns, and two thirds of graduates in creative arts, the subject with the lowest returns.

The impact of subject choice on the gender pay gap fades over time as other factors like having children and working part time come into play, they said.

Ben Waltmann, senior research economist at the IFS, told the Standard: “I think that people should make an informed choice and that includes information about the financial gain they can expect from different subjects at university and from different A-levels, and what career that opens them up to. It would be good for students to have more information on these sort of potential careers when they are choosing their A-levels.

“Money isn’t everything but we should give everyone the information.”

Xiaowei Xu, from the IFS, said: “Women disproportionately choose to study subjects that yield low financial returns. Of course, money isn’t — and shouldn’t be — the only factor when it comes to choosing what to study. But more needs to be done to inform young people about the financial consequences of degree.”

Tuesday’s IFS publication said: “When it comes to a subject like economics, which delivers the very highest financial return for female (and male) graduates, there is an additional concern that many students cannot access the subject at all because it is not offered in their school. Economics is more likely to be taught in private schools, which are in turn more likely to be attended by boys.”

Tuesday is the deadline for big companies to report their gender pay gaps.

In 2019 the gender gap in average annual earnings for all employees stood at 37 per cent.