Post-secondary education still pays off, although not as much as it used to, according to a new report from the Bank of Canada.
Researchers at the central bank examine the benefits of higher education when it comes to future earnings potential, and one finding is that workers with post-secondary education still earn more than those without it, but that the advantage has declined over the past couple of decades.
Based on data from Statistics Canada, the researchers found that, in 2018, workers with a university degree earned 53% more per hour than those with no post-secondary education. Further, those with other higher education (college, trade school etc.) earned 18% more.
“Wage premiums for higher education are substantial, but they have been falling over the past 20 years,” the report said.
Back in 1997, university graduates earned 63% more, and other forms of post-secondary education generated 20% more.
This decline in the returns for post-secondary education has come as a greater proportion of the population has pursued higher education.
Back in 1997, 15% had a university degree and 29% had other post-secondary education. By 2018, those metrics had increased to 28% and 33%, respectively.
As the supply of workers with higher education rises, the payoff for having a degree declines.
However, the report also found that the premium on higher education has held up for those working in fields related to their degrees — such as accountants, doctors, engineers and teachers.
These professionals earned 74% more back in 1997, and that advantage has been maintained, the research found.
Conversely, for university graduates that aren’t working in a job related to their degree, the payoff has dropped over time — falling from 51% in 1997 to just 35% by 2015.
“In short, getting a higher education still pays, especially if you land a job that uses your education in your daily activities,” it said.
This same advantage has also been evident during the pandemic, the report noted.
For workers with no post-secondary education, about 18% lost their jobs due to the pandemic, while only 8% of university graduates lost their job, it added.
“But it’s the nature of the job that matters, not the education level itself,” the report said, noting that for university graduates who aren’t working in a related field, 11% lost their jobs.