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Factors Leading to High Earnings for Economics Graduates


UK students often take jobs during their holidays and some save part of their income to pay their tuition fees. UK graduates earn, on average, £8500 a year more than non-graduates. Economics graduates had the second highest average earnings of all UK graduates in 2016. The top 10% of economics graduates earned £115 000 a year.

Analyse why economics graduates are well-paid.[6]


Labor Market and Income Distribution

[CIE O level November 2018]

Preview Answer

There are several reasons why economic graduates are often well paid. An economics degree is held in high esteem as a qualification. Graduates tend to be more skilled and tend to work in jobs with a lot of stress and responsibility. For example, data analysts and economists.

1.1 The diagram below shows the demand and supply of economics graduates and non-graduates.

(view diagram with full access!)

1.2 It can be seen that graduates have a high demand for their services.

This is because graduates may be more productive and work faster. Thus, the demand for graduates is more inelastic than non-graduates.

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