Education, social mobility, and earnings outcomes for students receiving free school meals in England

This research used data made available via the Office for National Statistics (ONS) Secure Research Service, which is being expanded and improved with ADR UK funding.

Author: Aidan Tolland, James Tierney, and Holly Bathgate (Office for National Statistics)

Date: January and August 2022

Research summary  

A research study using secure data has found that 23% of free school meals (FSM) recipients recorded earnings above the Living Wage compared to 43.5% of non-recipients. Further research determined that at age 30, FSM recipients earned around 20% less than independent school attendees with similar characteristics and attainment. This research demonstrates the potential of using linked administrative data to understand labour market outcomes and provide analysis of complex policy questions, such as social mobility.

This project used the Department for Education’s (DfE) Longitudinal Education Outcomes (LEO) dataset. This dataset enabled the researchers to explore whether people who grew up in low-income households experienced earnings mobility in young adulthood. The initial findings explore demographic and geographic factors which provide valuable insight into the patterns of social mobility across England. 

Data used

This project used the DfE’s LEO standard extract which was accessed through the ONS Secure Research Service.

The DfE has collaborated with other areas of government to create the LEO de-identified linked administrative dataset. LEO is a major database that as of 2021 comprised 38 million individuals. LEO brings together data from:

• the National Pupil Database 
• Individualised Learner Records
• Higher Education Statistics Agency (HESA) 
• Department for Work and Pensions (DWP), which includes income, employment, and benefit data.  

This project focused on early adulthood earnings for pupils who had been in education in England at Key Stage 4. In total, over 5 million individuals who turned 25 during tax years 2011/12 to 2018/19 were included in the living wage analysis, and around 1 million who turned 30 during tax years 2016/17 to 2018/19 were included in the free school meals earning gap analysis.  

Methods used

The researchers used free school meals eligibility at age 15 as a proxy measure for individual level socio-economic disadvantage during childhood. This is a common approach to identifying whether an individual grew up in a household with a low income, as details of family income and background are not yet available in the LEO dataset.  

For the living wage analysis, the research team used earnings data from employment Pay As You Earn (PAYE) records and self-employment self-assessment records to calculate annual ‘combined earnings’ at age 25. These were then compared with the Living Wage for the tax year they turned 25, an age by which most have completed formal full-time education and entered the labour market. 

Individuals were then categorised based on matching criteria, employment status and combined annual earnings:

• "Below Living Wage" - matched records that have recorded earnings at age 25 years below the annual equivalent of the Living Wage
• "Above Living Wage" - matched records that have recorded earnings at age 25 years above the annual equivalent of the Living Wage
• "No earnings record" - matched records that do not have earnings records at age 25 years but do appear elsewhere in the outcomes data
• "Unmatched" - those whose education records were not matched to outcomes records at any age. 

The free school meals earnings gap analysis looked at PAYE earnings only. It estimated the raw earnings gap at age 30 between FSM recipients, non-recipients at state schools, and independent school students. The researchers then used ordinary least squares (OLS) regression (a statistical method that estimates the relationship between one or more independent variables and a dependent variable) to estimate an adjusted earnings gap, taking into account attainment, experience, region, ethnicity, and gender.

Finally, Blinder-Oaxaca decomposition (a type of methodology used to study labour market outcomes by groups) was used to divide the difference in average pay between FSM recipients and non-recipients into the part which is explained by the differences in observed characteristics and the part which is not. 

Research findings

This project found that at age 25, 23% of FSM recipients had recorded earnings above the Living Wage and 42% had earnings below the Living Wage. Almost a third (29.2%) of FSM recipients were in the no recorded earnings group, with the remainder unmatched. In comparison, 43.5% of non-recipients had earnings above the Living Wage. There was a 13.8 percentage point difference between the proportion of FSM recipients who had no recorded earnings at age 25, compared with non-recipients. However, some of the individuals could have been in full time education, others in receipt of benefits.