Overeducated for Your First Job? That Might Cost You Later

A recent study says being overqualified for a first job after college can deflate your earnings now and into the future.

New college graduates might want to think twice before accepting a waitperson job. A new study suggests that your first job may have wage implications for years to come.

Based on 35 years of research, economists from Duke University and the University of North Carolina-Chapel Hill found that graduates who took a job they were overqualified for earned a smaller salary than their similarly educated peers, even up to a decade later. Time said:

In other words, starting off in a position that doesn’t match your education level can slow you down later in life.

That’s bad news for many students who find themselves taking any job they can get in a tough job market, especially when they have student loans to pay off.

It can be challenging to break free of underemployment. “After one year of being overeducated, 66 percent of these workers remained overeducated,” Vox said.

Overeducated workers have broad, long-lasting implications for the economy. Vox said:

These results also imply one way the economy will continue to underperform, even as the recession continues to recede in the rearview mirror. If all of those overeducated people persistently earn well below what they could have otherwise earned, it means less spending and less growth as well, in addition to the fact that all of those overeducated people are underutilized human capital.

After I graduated from college, I took a $7-an-hour job as a receptionist for about five months before I was hired as a reporter. Was I overeducated for that first job? Absolutely. And did I make embarrassingly low wages for years afterward? Yes. But I don’t know in my case if there was a link between being overeducated and underpaid for the next 10 years.

Regardless of my personal experience, this research certainly makes the case for being selective when choosing your first job after graduation.

What was your first job after college? Do you think it hurt your career? Share your thoughts below or on our Facebook page.

Stacy Johnson

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  • Anonymous

    Many of the office jobs are wanting a college education now…Office work will pay better than reporter job for 3+ years plus get you benefits…

  • Kerry Aggen

    This is good information! And, something that many new grads, and soon-to-be grads, should have.

    However, I wish this article had gone that one step further, of also discussing why it’s good for new grads just to have a job:

    One – even getting a job can be difficult in this broken economy.

    Two – having any job can be essential for getting another, “better” job. Many employers (or, really, those who understand life, and don’t just look at academic qualifications) know that having and keeping a job takes work and dedication, very important skills – yes, skills, as they can be learned behaviors.

    Three – having an income, even one that may not meet all your needs, is important, too. Having income coming in is very important, for many reasons, not just to keep bills paid. Unfortunately, too many new grads haven’t really learned to be financially responsible, or make good financial decisions – so, to be faced with the reality of having to decide between serious choices with real consequences, is extremely important, and essential learning for life-long good financial decision making,

    Four – even if the job is below their potential, it can help them learn new skills (like people skills, prioritizing, handling conflicting demands, dealing with difficult customers or fellow employees or bosses or even when they themselves are being difficult, etc.) that will help them tremendously in their careers, and lives. Many, too many, of these types of skills are NOT taught in any school except the “school of hard knocks.”

    I’m sure there’s lots more, but I got lots more to read on MTN!!!.

    Best wishes to all!

  • Jake

    I was trying to find some of their theories as to why that is. Come to find out, even though the paper was funded by NBER, we can not get it for free unless we are a government employee or a resident of a developing country. This is a great example of the customer service we can come to expect from the US government.
    I would be interested to see if they had developed any theories though. My first job after college was not underpaid, but I do take underpaid side-jobs from time to time for a little extra cash. I would have guessed the opposite results, because it seems that it is easier to find a job if you already have a job, even if that job is not the one you want.

  • Michael Smiley Gawthrop

    The first job I took out of college was one I was massively overqualified for (even without my degree, my experience working during college would have made me overqualified for what they were offering)… and I am incredibly grateful that I took that underpaying job, because while there was nothing truly new that I learned on that job, it did get me a ton of networking connections that led to me eventually getting a much better job (first moving up in the company, from a desk clerk to an internal auditor thanks to the recommendation of my manager, and then meeting an external auditor who was able to get me in touch with another company that was interested in hiring someone at 40% more than what I had been making). Taking just any job is probably still a bad idea, turning down a dead end probably will pay off in the long run, but any foot in the door is an improvement, even if it is a foot in the door in a position you are overqualified for.

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