Pupils who achieve higher grades at GCSE can expect to earn significantly more over their lifetime, research suggests.
Those who perform one GCSE grade better than their peers across nine subjects have been shown to earn on average over £200,000 more in their lives, according to a Department for Education (DfE) analysis.
Statisticians and economists at the DfE established a link between GCSE attainment and an increase in lifetime earnings after tracking the earnings of more than two million people in England over 12 years.
The research looked at people in England who sat their GCSE exams between 2002 and 2005 – alongside HMRC data – and found that those who achieved just one grade higher than their counterparts in one subject saw an increase in their lifetime earnings by an average of £23,000.
Those who secured one grade higher than their peers across nine subjects are likely to earn on average £207,000 more in their lifetime, according to the research which took 18 months to develop.
The report says there is wide variation in the marginal grade returns by individual GCSE subjects.
One-grade improvement in maths is estimated to be linked with an increase of £14,579 in present value of lifetime earnings, whereas the figure is around a third for German at £5,704 and £7,266 for English.
On average, men are found to have 18% larger marginal returns than women, while those not eligible for Free School Meals (FSMs) have 9% larger marginal returns than those that are eligible.
The report says it is “discouraging” that female students have smaller lifetime earnings overall and a smaller average absolute return to grade improvements.
School Standards Minister Nick Gibb said: “We are taught from a young age to do well at school to better our life chances, and today we see tangible, robust evidence to support this.
“GCSEs equip young people with the knowledge and skills they need to succeed and this data shows how small improvements to grades can have a huge overall impact on people’s lives.”
The DfE has said the research will be “pivotal” in creating new policies going forward.
Geoff Barton, general secretary of the Association of School and College Leaders (ASCL), said: “Nobody is going to be particularly surprised that children who attain higher GCSE grades earn more in their lifetimes because they are obviously more likely to progress to higher education and well-paid jobs.
“What is more surprising is the lack of recognition that we will always have winners and losers in the GCSE grading system because the distribution of grades is determined by a mechanism which means it is largely similar from one year to the next.
“This mechanism has been disrupted by the changes forced by the pandemic.
But in normal times it means that about one third of children at the age of 16 do not achieve at least a Grade 4 GCSE in the gateway subjects of maths and English. This is baked into the system.”