Workers’ First Jobs and Long-Term Wage Growth

• In Event: Occupational Segregation and the Wage Gap Between Men and Women

Abstract

This paper provides the first large-scale evidence in the U.S. on how workers' first jobs relate to their career progression, and how the importance of initial job placement varies across worker characteristics. Women and people from underrepresented racial/ethnic groups face barriers to workplace success and promotion (Bertrand, Goldin, & Katz 2010, Blau & Kahn, 2017; Goldin, 2014; Black et al., 2006; Sarsons et al., 2021). Research shows that the barriers groups face vary across occupations (Bjerk, 2007; Bertrand et al., 2010; Bayer & Charles, 2018). However, most of the literature emphasizes workplace challenges that accrue throughout peoples’ careers, and little is known about the influence of initial jobs and occupations on career trajectories and inequities. Other evidence indicates that an individual’s early-stage job can have a substantial impact on developing a valuable network of colleagues and professional development (Nunley et al., 2016). Thus, people’s first jobs seem like a potentially important channel through which longer-term inequities arise and potentially a way through which inequities in career progression could be addressed.

This paper provides some of the first evidence on how an individual’s first job impacts their later-stage outcomes using novel methods and data (Arellano-Bover 2021). We construct a longitudinal database of workers' wages, firm characteristics, and predicted occupations half the U.S. using linked data from the Longitudinal Employer Household Dynamics base and the American Community Survey.These data enable us to examine U.S. workers' occupations and wage mobility in the US for the first time on a large scale. 

We document how wage growth varies based on a worker's initial occupation. In general, wage growth tends to be highest for workers who start in occupations with the highest average starting wages, such as engineering. Though some occupations, such as accounting and police officers have high wage growth relative to baseline wages.

We also examine how wage growth varies within occupations for workers with different characteristics. Across every occupation, women have lower wage growth than men. Black workers also have lower wage growth than white workers across most occupations but the differences are smaller than for men relative to women.

​​This indicates that workers’ initial occupations play an important role in shaping their career trajectories and that differences between groups of workers are likely to expand over workers’ time in the labor market.

Author

• Isaac Mueller Opper, University of California - Los Angeles
  Presenting Author