First-generation US college students earn less than graduates whose parents went to college. This is why

When discussions take place about first-generation college students, often the focus is on how disadvantaged they are in comparison to their peers whose parents went to college.

Research we recently conducted shows that first-generation college students experience another form of disadvantage that lasts long after they graduate – and that is: how much they earn.

We are sociologists who focus on topics of career progression and class inequality.

Using data from the federal Baccalaureate and Beyond Longitudinal Study for 1992-93 graduates, we found that first-generation college students earn substantially less 10 years after graduation than college graduates whose parents went to college. This is the most recent data available that follows young people for 10 years after they graduate – a time when young adults’ incomes typically become more stable.

Substantial wage gaps

Our research found that first-generation men and women go on to earn, respectively, 11 percent and 9 percent less per year – or US$7,500 for men and $4,350 for women – than their peers whose parents also graduated from college.

Even when we compare students who have the same characteristics and experiences – such as socio-demographic background, having children or not, the type of institution they attended, major and grade-point average – first-generation men and women still earn, respectively, 6 percent and 3 percent less than men and women college graduates whose parents went to college. This second comparison rules out the possibility that differences observed in the first comparison are due to differences in the individual attributes of the two groups.

The wage gaps are uneven across universities and majors. Colleges and universities that are somewhat selective show the largest wage advantage for graduates whose parents went to college. More elite and less selective schools report smaller gaps.

When it came to majors most associated with subjective criteria, such as arts and humanities, we found a wage gap among men as high as 17 percent. In other words, men who are first-generation and study arts and humanities don’t earn as much as their peers who study the same thing and whose parents went to college. However, for men with STEM, vocational and education majors, the gap is between 3 and 4 percent and not significant.

So, what drives wage differences between first-generation college graduates and graduates whose parents went to college? It is mostly labor market factors. First-generation graduates more often landed in jobs in the public and not-for-profit sectors, which tend to pay less than jobs in the private and for-profit sector. They were also less likely to work in urban areas, where wages are higher.

It is also interesting what won’t do much to change the wage gap between first-generation college graduates and their peers whose parents went to college: getting first-generation students to attend more elite colleges. Our research shows that elite college attendance would only lower the wage gap between first-generation college graduates and their peers among men, and even then only about 8 percent, or $600 annually.

Our findings suggest that well-intentioned efforts to push first-generation students to attend the most prestigious colleges or to pursue higher-paying majors may not do much to change the wage gap that we discovered. First-generation students are already well-represented in several high-paying majors, such as business and health, so changing what first-generation students major in would not reverse the wage gap.

We also do not find much evidence of post-hiring discrimination by employers. In other words, first-generation college graduates with the same traits as their peers are paid the same amount when they enter the same occupations.

Taking different jobs

The issue is first-generation college students are not getting the same kind of jobs as their peers whose parents went to college.

Compared to their peers whose parents got a college degree, first-generation men are 4 percent less likely to be in the for profit sector and 3 percent more likely to be in state and local government. First-generation men are 4 percent more likely to be in clerical jobs and 3 percent more likely be in blue-collar jobs. They are 7 percent less likely to be in STEM professions.

This could be because first-generation college graduates are not familiar with the same types of jobs or don’t have the same kinds of networks as their peers whose parents went to college. It could also arise from where the jobs are located – first-generation graduates may live in different areas where there are fewer or worse job opportunities. They may also have a lower ability to relocate.

The difference in the kinds of jobs that first-generation graduates get could also arise from how employers in each field hire. For instance, prior research has shown that that elite employers value elite attributes more than working class attributes. One example is putting sailing on a resume versus track and field – elite employers are more likely to hire someone who sails.

Though the gap is small for first-generation students with the same bachelor’s degrees, labor market sectors, jobs, locations, hours worked and demographic traits as their peers whose parents went to college, we still believe that this gap deserves attention, especially for those concerned with creating a meritocracy. While meritocracy means equal rewards for individuals who have reached the same colleges or jobs, we cannot ignore the fact that inequality by social origin plays a role in who reaches those colleges and jobs in the first place.

Will wage gaps continue?

One of the shortcomings of our research is that we look at students who graduated over 25 years ago. Data is currently being collected for how much those who graduated in 2008 are earning 10 years after graduation, but it will be a couple of years before it becomes available.

This more recent data will be key to understanding how the wage gap has changed over time. If it shows that a wage gap still exists 10 years later for both groups, it means that colleges, researchers and others concerned with fairness for first-generation college students must look at more than what kind of experience those students have in college. They will need to look at changing what happens after college – that is, what kind of jobs students get and how much money they earn.