Why Your First Job Matters

New Research Reveals the Lasting Impact of Your First Job

A new study from Columbia University and the National Bureau of Economic Research reveals that your first job after college plays a bigger role in shaping your long-term income than your choice of major.

The research found that the quality and timing of that first job explains most of the earnings gap between low- and high-income graduates five years after college even when accounting for GPA, major, and school.

How Early Career Choices Affect Earnings

The study tracked more than 80,000 graduates from a large public university system and found that:

• Lower-income graduates were more likely to start at firms paying 18% less on average.
• They earned about 12% less five years later, even with similar academic performance.
• Only one-third of lower-income grads had a job lined up before graduation, compared to nearly 40% of their higher-income peers.
• Graduates who stayed at their first job for at least two years earned roughly $6,800 more by year five.

In short, your first job’s pay, stability, and growth potential have a compounding effect on your future earnings.

Why This Matters

Lead researcher Judith Scott-Clayton notes that small early differences in networks, timing, or access to information can have long-lasting financial impacts.

“When we see systematic differences by income, even among equally qualified graduates, that’s a signal something deeper is happening—whether it’s access to networks, financial pressure, or information gaps,” she explained.

Understanding these early dynamics can help new graduates, especially those from lower-income backgrounds, make more strategic career decisions.

How to Strengthen Your Start

Here are a few key takeaways for recent graduates and soon-to-be job seekers:
✅ Start early. Begin your job search before graduation by tapping into alumni, professors, and mentorship networks.
✅ Look beyond salary. Choose roles that offer training, stability, and room for growth.
✅ Stay long enough to learn. Sticking with your first job for at least two years can improve your future earning potential.

As Scott-Clayton emphasized, college still pays off overall but where and how you start can make all the difference in how that payoff grows over time.