How Much Should You Be Paid According To Your Education?

As we grow up, we know one thing is clear: the more education you receive, the bigger paycheck you can look forward to. But, is this principle always true?

Statistics SA and Analytico took the time to analyse South Africa’s salary versus education average. The results were interesting to say the least.

Factors To Consider In The Salary Versus Education Debacle

South African youth who stay in school for longer have much better salary prospects than those with limited schooling. This, according to Analytico – a company that provides earnings analysis in South Africa.

“Based on our research, staying in school for longer will have a significant impact on reducing the polarisation of our labour market. Education has a prominent role to play in reducing income inequality and depolarising a currently deeply divided society,” said company spokesperson Jaén Beelders.

The Problematic Drop-Out Rate

South Africa’s drop-out rate is currently estimated to be around 44.6% and is largely found in the more impoverished areas.

Young people decide to enter the labour market and apply for unskilled occupations. Once there they are found to be second best to more experienced individuals in the industry. This, in turn, decreases their chances of employment.

The report compiled by Stats SA and Analytico portrays a detrimental impact on the potential, future earning capacity of young South African dropouts. Additionally, students who drop out of school early will experience sustained periods of unemployment. This will also impact their potential earning capacity, compared to their more educated peers, resulting in a spiral of poverty and inequality.

Quality Of Education Received

Beelders also emphasises the importance of the quality of the education received in certain institutions to determine earning capacity when they leave school. Studies in South Africa have shown that the wealthiest 20% of South Africans had far better reading test scores in Grade 6 than the least wealthy 20% .

“Instead of fighting earnings inequality, the current education system, is reproducing the patterns of poverty and inequality that we are observing currently in South Africa.”

How Much Young South Africans Should Be Paid According To Their Education

The following analysis was conducted with Statistics South Africa data, using the Analytico Earnings Analysis ModelTM. The sample size was 717 364 individuals who had an education outcome between Grade 8 and Bachelors level. Figures were based on median gross income per month in October 2016 terms.

According to Analytico, this is how much you can reasonably expect to earn, per month, when entering the labour market:

No schooling: R 1 704
Some Primary (Grade 1 – 7 incomplete) education: R 1 867
Completed Primary School (Grade 7): R 1 946
Some Secondary Education (Grade 8 – Grade 12 incomplete): R 2 660
Grade 12: R4 977
Matric with Certificate: R 8 326
Grade 12 with Diploma: R 13 378
Bachelor’s Degree: R 21 527

The analysis does not, however, account for tenure, specific occupations, professional designations, decision-making bands, or the differentiation between full-time or part-time employed individuals.