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Pay gap between graduates and non-graduates narrows

Degree-holders more likely to land "middle skill" jobs and pay differential has narrowed.

The Office for National Statistics (ONS) has published figures showing that the pay differential between people with higher education qualifications and people with GCSEs has narrowed.

The report also concludes that people with degrees are more likely to work in lower-skilled jobs, with 41 per cent of degree-holders currently working in "middle skill" jobs, a category including sales, office and administrative work. Eight years ago, the percentage of graduates employed in the highest skill group was 68.

Degree-holders earn on average 45 per cent more than lesser qualified workers. The figure in 1993 was 54 per cent.

The average hourly pay of a degree-holder is £16.10, compared to £6.93 for a worker with no qualifications; £12.60 for a worker with a higher education qualification; £10 for a worker with A-levels, and £8.68 for a worker with GCSEs.

The narrowing in pay distribution comes as the cost of tuition fees are set to almost double, and a record number of young people are applying for places at university. A recent report commissioned by Santander has also shown that employers value employees with experience in the workplace over those with degrees but no experience.

These figures will raise new questions about whether many people can justify the cost of a degree, as the pay premium for degree-holders has shrunk considerably.