Research shows ‘gender pay gap’ is perceived by female students

But earnings expectations vary, with female students anticipating lower salaries than male counterparts – a reflection of a “gender pay gap” that exists in the labour market – while ethnic minorities expect a higher income. Also, work placements undertaken during a course lead to an expectation of higher salaries.

These are among the findings of continuing research by the University of Huddersfield’s Dr John Anchor, who is Head of the Department of Strategy and Marketing at its Business School. For the past seven years he has been researching the earnings expectations of students at university business schools in England and the Czech Republic. There are contrasts between the university systems in the two countries, with Czech students not having to pay fees, leading to a different perspective.

The research contributes to a field that is labelled “returns to education” – a reference to the financial return on the investment in time and money made by university students, or the “graduate premium”. One of Dr Anchor’s distinctive contributions is to investigate the salary expectations of current students at different stages of their studies.

One finding is that first-year students tend to have higher salary expectations than those in their final year, who have a better awareness of the labour market.

Gender pay gap for female students

Outputs so far from Dr Anchor’s research include an article in the journal Economics of Education Review and, most recently, a paper delivered at the annual conference of the Society for Research Into Higher Education entitled Earnings Expectations of University Students: Evidence from English Business Schools. It drew on research conducted in tandem with PhD student Martina Benešová that surveyed the salary expectations of more than 1,000 British students at two English business schools in 2011 and 2012.

The paper reported on findings that included the expectations of female students, who believed that their starting salaries would be 9 per cent lower than those of their male peers, but that they would be earning up to 16 per cent less than men in ten years’ time. A “gender pay gap” does indeed exist in the labour market, according to the conference paper.

On the other hand, students from ethnic minorities expected to earn more both immediately after graduation and 10 years later, compared with their white peers.

Students who undertake a work placement are more likely to be employed and their starting salaries tend to be higher, according to the research. Reasons for this include permanent job offers made after a successful placement and the fact that students who complete sandwich courses stand a better chance of obtaining a higher classification of degree.

Students remain optimistic about future job prospects

The research conducted by Dr Anchor and Ms Benešová found that despite the difficult economic situation, students remain optimistic about future job prospects, with more than 80 per cent expecting to be in a graduate-level job six months after completing their degrees.

Dr Anchor said that a recent element of his research was to discover if the new level of tuition fees at English universities had affected students’ earnings expectations. Higher fees might have been accompanied by an expectation of higher earnings, as compensation.

“But the evidence so far seems to be that students’ expectations of earnings are very similar to what they were before, which suggests that the change in the system has so far had little effect.”