Levelling the playing field? SES differences in graduate degree choices*

Abstract In many countries, subsidies towards higher education and financial assistance to students from poorer backgrounds have reduced socio-economic status (SES) gaps in the types of undergraduate degrees obtained. The increasing importance of graduate studies that are typically more expensive may, however, provide a new avenue for outcome differences by SES. We use administrative data from Ireland that allows us to explore SES differences while taking account of the exact undergraduate programme of study as well as a rich set of other controls. When we do this, we find differences by SES in the probability of undertaking graduate study and larger differences in the type of graduate programme entered. Low SES students are less likely to enter economics/business fields and more likely to enter education programmes – the lowest SES group enter fields of study with expected earnings that are, on average, about 3% lower compared to the highest SES group. We find that, at age 33, students in the lowest SES group who studied a graduate degree earn about 10% less compared to their highest SES counterparts – even for this high achieving group of graduates, those from the poorest backgrounds still earn significantly less than those from the most privileged backgrounds. Interestingly, we find choice of graduate programme of study can explain about 40% of this pay gap.