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£472,143: the value of a private education

Those who go to private school will earn an average of £472,143 more than state-educated pupils by the age of 65.

Eton. Photo: Getty
Those who go to private school will earn an average of £472,143 more by the age of 65. Photo: Getty

Private education: what a con. A new report from the Social Market Foundation finds that private education is worth an average of £57,653 to a person’s income later in life. Given that average annual fee for private day schools is £12,582, the temptation is to ask: why bother going private?

But hang on. The figure of £57,653 only takes into account the difference in earnings between private and state school pupils (discounting family background and social circumstances) between the ages of 26 and 42. For two people working to the age of 65, the benefit of private education would be worth £140,529 at a conservative estimate; and that’s before other benefits – higher pension plans; and the benefits of better paying jobs that they can they pass onto their children – are taken into account. That remains a good rate of return on the £85,000 it costs to send a child to an independent day school for seven years.

Most of the attention on the SMF’s report has focused on the value, or otherwise, of private education. But a more significant finding has been ignored.

In total, between the ages of 26 and 42, someone who attended an independent school will earn £193,700 more than someone who attended a state school. Strip away the benefits attributed to private education, and that still amounts to £136,047. Assume that the average benefits will continue to 65 (which amounts to a conservative estimate, as pay differentials increase later in life) and there is a £331,614 “dividend” for those attending private school that is attributable to family background and social circumstance.

Add it to the direct benefits of going to independent school, and those who go to private school will earn an average of £472,143 more than the state educated by the age of 65. This is what the New Statesman called the 7 per cent problem earlier this year.

Blaming it all on private schools is expedient, of course. But almost two-thirds of the earnings gap is down to wider advantages not related to what school you went to – wider social capital that is far more entrenched. The relationship between what parents and children earn is higher in Britain than anywhere else in the OECD. The reasons for this lack of social mobility go far deeper than where you went to school.