Crossing the Finish Line but Losing the Race? Socioeconomic Inequalities in the Labor Market Trajectories of Community College Graduates

Abstract

Despite decades and hundreds of billions of dollars of federal and state investment in policies to promote postsecondary educational attainment as a key lever for increasing the economic mobility of lower-income populations, research continues to show large and meaningful differences in the mid-career earnings of students from families in the bottom and top income quintiles. Prior research has not disentangled whether these disparities are due to differential sorting into colleges and majors, or due to barriers lower-socioeconomic status (SES) graduates encounter during the college-to-career transition. Using linked individual-level higher education and Unemployment Insurance (UI) records for nearly a decade of students from the Virginia Community College System (VCCS), we compare the labor market outcomes of higher- and lower-SES community college graduates within the same college, program, and academic performance level. Our analyses show that, conditional on employment, lower-SES graduates earn nearly $500/quarter less than their higher-SES peers one year after graduation, relative to higher-SES graduate average of $10,846/quarter. The magnitude of this disparity persists through at least three years after graduation. Disparities are concentrated among non-Nursing programs, in which gaps persist seven years from graduation. Our results highlight the importance of greater focus on the college-to-career transition.