Pay gap for Irish graduates wider than in Europe

The pay gap between college graduates and others is far wider in Ireland than in most European and other developed countries.

The finding from the latest annual bible of global education statistics could strengthen arguments for a restructured way of increasing third-level fees, including a student loans scheme option being considered by TDs and senators.

As the Government awaits the outcome of deliberations by the Oireachtas education committee on various options to bolster funding of the higher education system, the Education at a Glance 2017 report shows the benefits of a third-level qualification for Irish graduates.

It found that a man with a third-level degree stands to take home €340,000 more over the course of his career than a counterpart whose highest qualification is the Leaving Certificate.

That is after taking into account the costs and earnings foregone while attending college.

This earnings premium is the third-highest in almost 40 countries in the Organisation for Economic Co-operation and Development (OECD), which published the report.

Although the comparable benefit for Irish women is less, at €250,000, it is the second-highest pay advantage for female graduates in the OECD.

It is 50% higher than the average difference across all developed countries, compared to a 40% pay differential for higher-educated men.

Those who favour students paying much higher fees than the current €3,000 annual charge for undergraduate third-level courses may point to these figures as justification.

The Department of Education has been working on the implications of various models for students if a loan system were introduced that required graduates to pay such increased fees after reaching a certain income threshold.

But the OECD report also points to Ireland as one of the countries — along with Luxembourg and Portugal — where governments gain the largest returns from a well-educated population, as well as graduates themselves.

“Since higher levels of educational attainment tend to translate into higher earnings, investments in education generate higher public returns,” the Education at a Glance report states.

It makes the case, as argued by those favouring substantial increases in Government funding for higher education, that those with third-level qualifications pay higher income taxes and social contributions, and require less welfare assistance.

Although the 82% employment rate of third-level graduates aged 25-64 in Ireland is lower than an 84% OECD average, recent graduates were somewhat cushioned by comparison with others by recent falls.

“The fall in the employment rate among [third-level] educated young adults (25-34-year-olds), from 91% in 2000 to 84% in 2015, was quite moderate compared to the fall for those without tertiary education,” said an OECD summary of Irish statistics.