Achieving just one GCSE grade higher across nine subjects could mean a boost of more than £200,000 to a pupils’ lifetime earnings, according to a new study.
Released by the Department for Education, the research tracked the earnings of more than two million people in England over a 12-year period.
It found that those who achieved one grade higher than their peers in one subject saw an increase in their lifetime earnings by an average of £23,000.
However, headteachers have warned that the current exams regime has a proportion of winners and losers baked into the system and, if it is persisted with, then there will always be a “forgotten third” of pupils.
Geoff Barton, the Association of School and College Leaders’ general secretary, said that, in normal years, around 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.
Exclusive: Most teachers are against scrapping GCSEs
GCSEs 2022: Year 10s 'have missed 1 in 4 teaching days'
The DfE 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 per cent larger marginal returns than women, while those not eligible for free school meals have 9 per cent larger marginal returns than those who are eligible.
The report says it is “discouraging” that female students have smaller lifetime earnings overall and a smaller average absolute return on grade improvements.
The research, the DfE said, will be used to create new policies going forward.
It said: “For example, when a new policy is developed to help pupils achieve better GCSE grades, this data will be used to create a quantitative, monetary value to evidence how a policy can affect earnings outcomes.”
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.”
Mr Barton 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. If we persist with this approach, there will always be a ‘forgotten third’ who are likely to fare less well in life than other children. It is a key feature of the cycle of disadvantage which continues to blight our society.
“GCSEs are a well-recognised qualification but there is surely an overwhelming case to rethink the current approach to how they are graded so that the system works in a better way for all our young people.”