Students graduating university with a first class degree earn £7,900 a year more than those with a lower second class grade within five years of finishing the course. 

Graduating with a high class degree makes a large difference to earnings potential in the early years of a career, according to a report by think tank the Institute for Fiscal Studies, which was commissioned by the Department for Education. 

Those with a 2:2 degree in 2013 earned £3,800 less than those who received a 2:1, the report found.

The gap in earnings between receiving a higher and lower second class degree is much greater than the gap between getting a first and a 2:1 across all degrees, said Jack Britton, of the IFS, and an author of the report.

“In fact, for many subjects, the difference between a first and a 2:1 is inconsequential for earnings. However, for others, such as economics, law, business, computing and pharmacology, it is substantial,” he said. 

Getting a lower second class degree, rather than an upper second, costs graduates 15pc on their future earnings for those studying law or economics. However, there is no significant difference for those studying education or English, which tend to lead to lower-paid jobs. 

Grades can have a larger bearing on future earnings than the excellence of the university. Those who get a 2:2 from a highly selective university, such as Oxford, Cambridge or the London School of Economics, could have achieved a higher-paying job if they had attended a slightly less prestigious university and secured a 2:1. 

However, there is a 20pc pay penalty by age 30 for men and women who graduate with a 2:2 from the most selective schools.

Final marks also have less of a bearing on women’s pay. Men in their twenties who gained a first typically earn 7pc more than if they got 2:1, but women earn just 4pc more. 

The pay-off of higher grades falls to near zero for women at the top universities, while male graduates with a first-class degree earned 14pc more than those who got an upper second.