Graduates who grew up in deep poverty still earn �2,800 less than their peers 10 years on

25th March 2026

A graduate who grew up in deep poverty will earn 5 per cent less - over £2,800 a year - than a more privileged peer working at the same firm with an equivalent degree a decade after graduation, highlighting the scarring effect of childhood poverty, according to new research published (Tuesday 24 March 2026) by the Resolution Foundation.

The long shadow - funded by the Nuffield Foundation - uses comprehensive data which tracks the educational pathways and earnings of over half a million graduates in England, including 35,000 who grew up in deep poverty, measured by eligibility for Free School Meals (FSM) aged 16.

Overall, after ten years of work there is a large pay gap of 13 per cent (£7,590 per year) between graduates who grew up in deep poverty and those who did not.

These poorer graduates are already underrepresented at university, with only 16 per cent obtaining a university degree compared to 32 per cent of those from more affluent families. But while a degree remains a valuable asset - at age 31 graduates overall earn almost 50 per cent more a year (£18,700) than non-graduates - the report finds that the long shadow of childhood poverty is hard to escape, even for those who overcame the hurdles of making it to graduation.

Students from poor families are less likely to attend the most selective universities - 15 per cent compared to 29 per cent of more affluent graduates – and are less likely to receive First-class and Upper Second-class honours – 36 per cent compared to 44 per cent.

All told, even when comparing graduates who were course mates and got the same degree, a 7 per (£3,800) cent gap in earnings 10 years after graduation remains. This reduction in the earnings gap – from 13 per cent to 7 per cent – shows that were access to and performance at university more similar between poor and more affluent graduates, disadvantaged young people would face a much smaller, though still significant, penalty.

There are also differences in where people work and who they work for. But even once educational outcomes and employer choice are accounted for, the authors still find a five per cent deep poverty gap in earnings a decade later – equivalent to £2,800 a year.

This as-yet unaccounted for pay penalty – where two work colleagues sitting next to each other with the same degrees and same level of experience could earn different amounts due to one experiencing poverty in childhood – highlights the enduring scars left by deprivation in early life.

Further research is needed to fully account for the diminished earnings prospects faced by graduates who experience childhood hardship. But the Foundation notes that given the long-term pay penalty, action to reduce child poverty is needed, as is action to reduce the educational disadvantage – starting at school and continuing at university – that poorer children suffer.

Julia Diniz, Economist at the Resolution Foundation, said:

"University has long been seen as a way out of poverty and up the income ladder. But while getting a degree offers everyone a big boost in earnings, graduates who grew up in deep poverty struggle to fully catch up with their more affluent peers.

"What degree you get continues to impact on your earnings a decade into your career, but poorer students are less likely to gain access to the best universities and get the best grades. And even when they do get the same degree and work at the same firm as more privileged graduates, they still earn thousands of pounds a year less.

"Understanding why the long shadow of childhood deprivation remains so hard to escape is the first step. But we can't stop here: no young person should be penalised by poverty, and poorer graduates who have already overcome the odds should be able to reap the rewards of their hard work."

Key findings
Graduates who experienced deep poverty in childhood earn around 13 per cent less than their better-off peers a decade after graduation.

Part of this gap reflects differences in the universities attended, subjects studied, degree outcomes achieved and the employers that graduates who were and were not in deep poverty in childhood work for.

But even comparing graduates who finished university with the same degree and 10 years later work for the same employer, a pay penalty of 5 per cent remains.

Graduates who were disadvantaged in childhood climb the job ladder, moving from lower-paying to more similarly-paying employers to their better-off peers, and this helps narrow the gap slightly over their first decade in the labour market.

Does Background Still Matter After University? What England's Evidence Means for Scotland

For years, the promise of higher education has been simple and powerful: work hard, get a degree, and you will improve your life chances. It is a narrative deeply embedded in public policy and widely accepted by families across the UK. But recent research from the Resolution Foundation challenges that assumption in an uncomfortable way. Its report, The Long Shadow, finds that even after graduating from university, people from disadvantaged backgrounds in England still earn less than their more privileged peers.

This raises an obvious question north of the border: does the same pattern hold in Scotland?

At first glance, Scotland might appear different. Tuition is free for Scottish students studying at Scottish universities. The school system is more comprehensive, with less academic selection than in England. There has also been a sustained policy focus on widening access to higher education. All of this suggests a system designed to reduce inequality rather than reinforce it.

And yet, when we look more closely, the underlying forces identified in the report are not uniquely English. They are structural features of modern economies—and Scotland is unlikely to be immune.

The central finding of the Resolution Foundation’s work is that a degree does not fully "level the playing field." Graduates from poorer backgrounds still tend to earn less, even when they have similar qualifications to their peers. This points to factors beyond formal education: family networks, confidence, access to internships, and the subtle advantages that come with growing up in a more affluent environment.

There is no obvious reason why these dynamics would stop at the Scottish border. Social background influences opportunity everywhere. Who you know, where you feel comfortable applying for jobs, and whether you can afford to take risks early in your career all shape long-term outcomes. These are not differences that disappear simply because university is free.

If anything, geography may make the issue more pronounced in Scotland. One of the report’s most striking conclusions is that “place” matters—where you grow up and where you build your career has a significant impact on earnings. In England, this often shows up as regional divides between London and other areas. In Scotland, the divide is just as real, but it takes a different form.

Opportunities are heavily concentrated in the Central Belt, particularly around Edinburgh and Glasgow. By contrast, rural and remote areas—from the Highlands to the islands—offer fewer high-paying roles and more limited career progression. For graduates who grow up in these areas, the challenge is not just educational attainment but access to opportunity itself. Staying local may mean fewer options; moving away may mean leaving behind support networks and facing higher living costs.

This creates a quieter but equally powerful inequality. Two graduates with the same degree may face very different futures depending not just on their family background, but on their geography.

That said, Scotland’s system may still mitigate some aspects of inequality. Free tuition removes the burden of student debt, which can influence career choices, particularly in the early years after graduation. A larger public sector may also compress wage differences at the top end compared to London’s high-paying private industries. These factors could narrow some gaps, even if they do not eliminate them.

But the broader message remains: access to university is only part of the story. What happens after graduation—entry into the labour market, career progression, and access to opportunity—matters just as much.

This has important implications for policy. If the goal is to improve social mobility, focusing solely on getting more disadvantaged students into university is not enough. Attention must also turn to:

Graduate job opportunities across different regions
Support for early career progression.

Addressing barriers to professional networks and experience.

In other words, the “long shadow” of disadvantage does not end at the university gates. It stretches into the workplace, shaping careers in ways that are often invisible but deeply consequential.

For Scotland, the lesson is both reassuring and challenging. The country has taken meaningful steps to widen access to education, and that should not be underestimated. But if inequality persists beyond graduation—as the evidence strongly suggests—it means the next phase of reform must go further.

Because the real test of a fair system is not just who gets into university. It is what happens next.

Read the full report HERE
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