Does Your Alma Mater Influence Your Lifetime Earnings?
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.
Yes, although many of us were told that it “doesn’t matter” where we go to college, that we can get “just as far” as someone from one of those prestigious schools, this might not actually be the case.
Or, even if we do get “just as far,” we might not earn quite as much. As Philip Jefferson, Professor of Economics at Swarthmore College, explains:
[Jefferson] 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.”
My first question is “okay, are they calculating student loan debt into this?” After all, many of us chose our alma maters because of their financial aid packages—and even if we might have had a higher starting salary somewhere else, we would have also had more debt to pay down.
Ester asks the same question, and Jefferson suggests that high school students compare the whole package: financial aid now vs. starting salary later.
But that’s a lot of variables to try and keep track of, and who knows where starting salaries will even look like, four or five years from now. We could be in another recession. We could be in an economic boom while simultaneously transitioning to a robot workforce. I started working as an executive assistant in 2007; my starting salary would have been at least $5,000 less had I started the same job one year later.
This is also presuming that high school students already know the career in which they’ll earn that starting salary. Which… I mean, raise your hand if you’re currently doing the job you thought you’d have when you were in high school.
If it were me giving the advice, I’d weigh the financial aid package a lot higher than any theoretical starting salary. But I’d also want to make sure college students were equipped with networking, interviewing, and negotiating skills—none of which I was taught as an undergrad—along with basic workplace skills so they won’t end up the subject of an Ask a Manager column.
I’d also remind college students that, as Jefferson notes, the equation changes once you go to grad school—which means it makes even more sense to focus on financial aid now and salaries later.
What about you? What advice would you give today’s students—or your former self?
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