Press release

More pupils succeeding in school adds £1.3 billion to economy

Research highlights the value of educational performance to the national economy.

This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

Children writing

The boost in the number of pupils getting good GCSE grades since 2010 is estimated to add around £1.3 billion to the country’s economy, as a landmark study reveals the extent to which GCSE achievement has a wider financial impact.

The study found that reaching 5 A* to C grade GCSEs, including the valuable English and maths qualifications, is worth £60,000 to an individual’s lifetime productivity. When scaled up to reflect the large increase in pupils getting these grades since 2010, this represents an estimated £1.3 billion boost to the country’s economy.

The research has revealed the extent to which improved educational outcomes are benefitting the country, as well as pupils themselves. It is based on the detailed analysis led by the Department for Education, and reviewed by the Institute for Fiscal Studies, which analysed the higher wages and better job prospects associated with doing well at school.

Since 2010 the proportion of pupils leaving school with 5 A* to C GCSEs, including English and maths, has risen from 44.1% to 47.8%. This increase is equivalent to 21,600 more pupils fulfilling their potential. This increase represents a long-term boost of £1.297 billion to the country’s economy.

Education Secretary Nicky Morgan hailed the findings, saying:

Our plan for education is working - the boost in pupils achieving good grades since 2010 is adding more than £1.3 billion to the country’s economy. This confirms the rise in pupil success is not only benefitting young people themselves but is also a valuable part of our long-term economic plan.

800,000 more pupils are in good or outstanding schools and thousands more are getting solid GCSE grades - a testament to the hard work of schools and teachers.

But we won’t stop here - our plan is determined to raise standards further, help teachers to push our young people to do even better and help even more to fulfil their potential.

The £1.3 billion boost is equivalent to more than 400 new primary schools across the country.

A large proportion of the increased performance is among disadvantaged pupils. Since 2010 the proportion of these pupils leaving school with this good package of qualifications has risen from 27.5% to 32.9%. This is equivalent to 7,150 additional pupils and represents a substantial economic benefit of £430 million.

The government’s plan for education is designed to ensure pupils are receiving the best education possible. Since 2010, 800,000 more pupils are studying in good or outstanding schools - the highest number on record - helping thousands more pupils to fulfil their potential and realise their aspirations.

The plan includes:

  • increasing the quality and value of qualifications by raising standards and toughening up exams
  • intervening in more than 1,000 failing schools, pairing them up with excellent sponsor groups with track records of turning around schools
  • approving an unprecedented number of new schools - more than 400 - amounting to upwards of 200,000 new school places
  • toughening up on behaviour and attendance, allowing teachers to focus on teaching
  • investing billions in helping our most disadvantaged pupils succeed through the pupil premium
  • increasing teaching standards by helping the most talented people to enter the profession - resulting in the highest number of teachers on record

The estimates in this report are based on pupils achieving full-course academic GCSEs - and therefore only include more robust qualifications. The improvements in achievement since 2010 are significant and will be influenced by a number of factors including better-quality teaching, improved school leadership and management, and investing in our most disadvantaged pupils through the pupil premium.

Region Proportion of pupils achieving 5 A* to C GCSEs, including English and maths in 2010 Proportion of pupils achieving 5 A* to C GCSEs, including English and maths in 2014 Increased number of pupils achieving 5 A* to C GCSEs including English and maths Economic benefit
East Midlands 41% 44% 1,349 £80.9 million
East of England 47% 48% 1,131 £67.9 million
London 47% 54% 5,225 £313.5 million
North East 38% 42% 1,385 £83.1 million
North West 44% 48% 3,233 £194.0 million
South East 48% 52% 3,207 £192.4 million
South West 46% 48% 1,138 £68.3 million
West Midlands 41% 45% 2,419 £145.2 million
Yorkshire and the Humber 38% 42% 2,116 £126.9 million

Notes to editors:

  1. The 2014 GCSE figures used in this report are not comparable with the recently released published figures because they include retakes in order to be consistent with the 2010 figures.
  2. The estimate of the increased number of pupils achieving good GCSEs is based on subtracting the 2010 GCSE pass rate from the 2014 pass rate, and then multiplying this percentage difference by the size of the key stage 4 population in 2010. Holding the cohort size constant over this period avoids attributing any of the economic benefits to there simply being more pupils in 2014 due to population growth.
  3. The Department for Education estimates that achieving 5 to 7 GCSEs at grades A* to C (including English and maths) is worth on average around £60,000 discounted over the working lifetime, compared to achieving 3 to 4 GCSEs at A* to C. This estimate takes no account of the wider benefits from improved educational attainment such as improved health outcomes or reduced crime.
  4. The analysis assumes that this value remains constant regardless of the proportion of pupils who have achieved a good level of GCSE performance. It also takes no account of the increased numbers of pupils progressing to higher qualification levels (such as A levels, apprenticeships or degrees) as a result of improved GCSE performance.
  5. The figure for the number of primary schools that £1.3 billion could afford includes the construction of the school, its furniture and ICT (information and communications technology), taking into account the location of the potential schools.

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Published 7 December 2014