Launching your professional career after college can be difficult, especially if you’re graduating into a challenging job market. And if simply landing a job isn’t stressful enough, new research shows that first job can have a lasting impact on your earning power.
Every additional $1,000 students earn in their first job out of college translates to an additional $700 in annual earnings five years after graduating, a new National Bureau of Economics Research paper finds.
Since career and salary progression tend to be cumulative, starting your career in a low-paying or low-value job can make it difficult to catch up to workers who start with higher salaries or jobs that help them advance their careers faster. The findings build on earlier research that has found workers who graduate into poor economic conditions like a recession can take years to catch up.
Students from low-income families may be more likely to land in lower-paying or lower-quality jobs right out of school, the researchers find, therefore feeling the impact of those roles for years.
Students from low socioeconomic status families — defined as students who received a Pell Grant for the entire duration of their studies — earn $4,900 less per year on average than students from higher socioeconomic status families five years after graduating despite having the same major, grade point average and college, the researchers find.
