An economics professor has found that your salary straight of college sets the tone for the rest of your career — and that your college often sets the tone for your salary.
Invited to address a conference on human capital and mobility hosted by the Federal Reserve Bank of Minneapolis, Swarthmore College Professor of Economics Philip Jefferson used Payscale.com data collected by John Calia, his student and collaborator, on starting and mid-career salaries from the graduates of nearly 1,000 educational institutions. He wanted to know if it was possible for someone to move up the income ladder within their lifetime and if that correlates with what college they attended, Swarthmore reports on its News & Events page.
He found that if you only get a bachelor's degree, the college you attend has a measurable effect on how much money you make, both immediately after graduation and for the rest of your working life. As he puts it, "if you are behind someone early in their career, by the time you get to mid-career, you are still going to be behind that person. And the only way you could have caught up was by going to a different school."
Jefferson explains: "What we showed is that the relationship between early-career pay and mid-career pay is linear and positively sloped. ... Once you graduate from a school, you were not going to be able to catch up to somebody that graduated from a different school who started with a different pay.
"If you start out 10 percent behind, you are still going to be 10 percent behind mid-career."