trends-2011-vol1-enrolment-e

The value of a university degree
The value of a university degree can be measured by the private and
public benefits it brings to the holder, his or her family, community,
workplace and Canada. Labour market trends also send important
signals to students and their parents about the value of a university
degree to the Canadian economy. They condition perceptions of the
value of a degree and influence critical investment decisions among
many partners in our society: students, their parents, educators,
governments and employers.
While a degree is of great value beyond the role graduates play
in our labour force, it is nevertheless clear that students respond
to labour-market signals. Students generally give adequate
consideration to the extent to which education investments will
benefit them personally (private benefits), such as the prospect of
earning a higher income, confronting fewer and shorter periods
of unemployment, and the ability to pursue a desired career path.
However, students are not always aware of, nor do they typically
consider the extent of the impact of their education on others
(public benefits). These include: living a healthier and longer life,
contributing to the productivity of co-workers, and being more
socially and politically engaged in all aspects of society. Economists
refer to this type of “market failure” as the prime reason for
government investments in higher education. Without proper
50-54 incentives 54-59 60-64 from 65-69government, 70-74 75-79 80-84students 85-89 90+ will not make optimal
enrolment decisions.
capita health care costs rise dramatically for
age of 70
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40-44
45-49
stitute for Health Information
Several Canadian researchers 30 have used Census data to quantify
income advantage between university graduates and high school
graduates. One of the more recent studies compares data from the
last six Censuses, and shows that the income advantage for male
and female bachelor’s graduates grew significantly between 1980
and 2006. The Boudarbat, Lemieux and Riddell study (2010) shows
that in 1980, the income advantage for male bachelor’s graduates
was 37 percent greater than high school graduates. By 2005, the
income advantage had grown to 50 percent (much of this increase
took place from 1995 to 2005). Researchers also noted an income
advantage for college and trade school graduates over the same
period, but it was much smaller, approximately seven percent in
1980, up to 15 percent in 2005. 31
Income relative to men with a
high school diploma
70%
60%
50%
40%
30%
20%
10%
0%
-10%
-20%
FIGURE 37: The earnings advantage for male university graduates
increased significantly between 1980 and 2005
1980
1985
1990
1995
2000
2005
Private returns of a university education
Education is a critical factor in one’s earning potential. There
are three principal private returns for individuals with a university
education: they have a higher income advantage, are less likely
to experience long periods of low income, and are less likely to
experience labour disruptions. When they do experience labour
disruptions, it is typically for much shorter periods of time.
Canadian labour market is generating a
nd for graduate degrees
Less Postgraduate than high degree school
diploma
College Bachelor's Less than and high degree trade school diploma diploma
College and trade diploma
Source: Boudarbat, Lemieux, Riddell 2010
Bachelor's degree
Postgraduate degree
AUCC
Trends in Higher Education | Volume 1. Enrolment | 39
Employed part-time
Graduate degree holders
employed full-time