Section 5 Graduates' labour market outcomes

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This section examines employment rates, incomes and occupations of doctoral graduates, two years after graduation. Since this information is drawn from the National Graduates Survey (NGS), it refers to graduates who were still in North America in 2007, rather than to all graduates of 2005. Those still in Canada or the United States in 2007 accounted for 83% of the graduating class of 2005.

Employment rates varied by field of study

By 2007, four graduates out of five were employed workers, with an additional five percent being self employed, and six percent being unemployed. Eight percent of graduates were out of the labour force, with the majority (about 5%) reporting that they were still in education. When these graduates were excluded, the unemployment rate increased to 7% for all graduates, though this varied considerably across fields of study. Graduates from the humanities reported an unemployment rate of 16%, which was twice as high as the next highest field, engineering at 8% (Appendix tables A.13 and A.14).

Rates of part-time employment were also quite high for certain fields of study. Excluding current students, 8% of employed graduates were in part-time employment (Appendix table A.15). The rate of part-time employment was lowest for engineering graduates at 2% and highest for humanities at 18%.

The median income for doctoral graduates in 2007, two years after graduation, was $65,000

The median income for all graduates was $65,000, while graduates at the 25th percentile were paid $48,387 and those at the 75th percentile were paid $79,000 (Chart 9).

Graduates' incomes also showed considerable variation across fields of study (Chart 9). Graduates of the life sciences had the lowest median income in 2007 at $55,000 and also the lowest 25th percentile income at $41,500. This is in contrast to findings from the Survey of Earned Doctorates (SED) that examined graduates expected income where in 2004/2005 and 2005/2006, graduates of the humanities expected the lowest incomes. Measured in 2007, humanities graduates had a median income of $60,000, placing it on par with graduates from computer, mathematics, and physical sciences graduates, performing better than what they expected at the time of graduation. However, humanities graduates had the lowest income reported at the 75th percentile ($69,000). The highest incomes were reported by graduates of programs in education and other fields of study ($80,000). Part of this earnings advantage may reflect prior work experience, as education doctoral graduates had the highest median age at graduation across all fields of study.

Chart 9 Income of graduates at the 25th, 50th and 75th percentiles, by field of study

Box 3
How well does expected income predict actual income?

As previously mentioned, linking SED and NGS data provides an opportunity to examine the usefulness of certain measures captured in SED. Given that in SED graduates were only just entering the labour market, outcomes were approximated by asking what their expected income was if they had firm plans for employment. Lining these expectations up to actual income in 2007 (displayed here in 2005 dollars) reveals that, particularly in the lower ranges, graduates' expectations were considerably below the median earnings reported two years later (Chart 10). Above an expected income range of $35,000 to $44,000, expected incomes seem to reasonably approximate actual median income, after accounting for some growth in income over the two years between SED and NGS.

Chart 10 Expected and actual income of graduates who reported an expected income in 2005 and who were employed in 2007

End of box

There were differences in income between men and women, immigrants and Canadian-born

Income differences were also noted between men and women and between immigrants and Canadians by birth. Across all fields of study, men were paid a median income of $65,000 compared to $61,000 for women. The difference was largest in education and other fields of study as well as in the life sciences, where the difference in median income was about $8,000. While in education and other fields, the men were paid more than the women, in the life sciences it was the women who earned more than men, $57,000 versus $49,462. Psychology and social sciences was the only other field for which there was a significant difference, namely $7,000. It is unclear how much of the difference may be due to more specific field of study choices within these aggregate categories.

On the other hand, the median income was comparable between the genders in engineering, in computer, mathematics and physical sciences as well as in the humanities (Appendix table A.16).

Canadian-born graduates earned a median income of $64,000 in 2007 compared to $60,000 for foreign-born graduates. Significant differences were also observed among humanities graduates and graduates from education and other fields of study where Canadian-born graduates earned about $5,000 more than their foreign-born counterparts (Appendix table A.17).

Graduates with postdoctoral intentions earned less in 2007 than those without

The linked NGS-SED file adds some additional explanatory power in examining graduates' incomes. Bayard and Greenlee (2010) in their examination of graduate outcomes, note that doctoral graduates' earnings were not that different from those with a master's degree, despite a significant additional investment in learning by doctoral graduates. For men, both master's and doctoral graduates earned a median income of $65,000, while for women; doctoral graduates earned $5,000 more than master's graduates.1 However, using the NGS data alone does not allow the identification of doctoral graduates who were in a postdoctoral position in 2007. Though graduates were asked to indicate if they were still in the educational system or if they were employed, postdoctoral work might best be described as somewhere in between the two.

SED asks two questions regarding postdoctoral education. The first, posed only to graduates who have already made firm plans, asks if the employment or education they will be undertaking is a postdoctoral position. The second is posed to all graduates and asks if they intended to do a postdoctoral degree. Neither is a perfect measure of graduates' activities between 2005 and 2007, but they do reveal an important distinction between graduates (Chart 11). Whereas the median income of all graduates in 2007 was $65,000, those with postdoctoral intentions had a median income of $54,000, while those without had a median income of $72,000; an earning gap of $18,000. The difference was largest in the life sciences, where graduates who intended to take a postdoctoral position earned a median income of only $45,000 compared to the $72,000 of graduates with no postdoctoral intentions. This illustrates that an important earning gap exists between those who planned postdoctoral work and those who intended to enter directly into the labour market. Linking these two files shows that not taking into account those in postdoctoral positions results in an underestimation of earnings of doctoral graduates.

Chart 11 Median income of graduates in 2007 by postdoctoral intentions and field of study

5.1 How are doctoral graduates employed?

Since doctoral education requires a large investment by the individual, often one that is matched by a similarly large investment by governments, it is important to know if these investments are worthwhile. Graduates' income is one indicator of how a society values certain skills. Another is the match or mismatch between the amount of education required for employment and education attained. Overqualified workers have made investments in human capital that have not yet been recognised or that were not necessary for the job held in 2007. Thus, overqualification may also be thought of as the underutilization of human capital by the economy, or alternatively, as an overinvestment in certain skills by the individual and governments.

Two definitions were used to identify overqualified individuals. The first is a self-reported indicator of whether or not the graduate felt overqualified for their current position. The second was derived by matching the respondent's educational attainment (i.e. doctorate degree) to the level of education they said was necessary to obtain the job. If less than a doctorate degree was required for their employment then they were classified as being overqualified. The results are displayed in Chart 12 below.

Chart 12 Proportion of graduates overqualified for current job, defined using 2 different definitions, by field of study

Overall, and for each field of study, fewer employed graduates reported being overqualified (definition one) than reported needing less than a doctorate degree to obtain their job (definition two). Approximately one in five graduates (19%) said they were overqualified, compared to 30% who reported that less than a doctoral degree was needed to obtain the job they were in.

There were notable differences across fields of study. Engineering graduates were the most likely to indicate that they were overqualified for their position (28%), while graduates from education or other fields were the most likely to report that education below a doctorate was required for obtaining their job (43%). On both definitions, life science graduates were the least likely to be overqualified (16% and 21% respectively).

The largest difference between the two definitions was in education and other fields, where an additional 21% of graduates were classified as overqualified using the second definition, and in the humanities, where an additional 16% of graduates would be considered to be overqualified.

The underutilization of graduates had an impact on earnings as well. Employed graduates who reported being overqualified for their job (definition one) had a median income that was $5,000 lower than other graduates. Significant differences were observed between overqualified and non-overqualified graduates in psychology and social sciences ($5,000), the humanities ($17,000), and education and other fields of study ($14,000). Graduates from the life sciences, engineering and computers, mathematics and physical sciences showed no difference in median income conditional on overqualification (Appendix table A.18).

The majority of graduates were employed in educational services

A different way of examining outcomes is to look at in which industries and occupations graduates are found. Examining employment by industry reveals that graduates were clustered in a small number of industry groups and that certain industries were more closely associated with specific fields of study.

The majority of graduates (56%) were employed in educational services; the vast majority of them working in a university (87%). Employment in the educational services was highest among humanities graduates (77%) and among graduates in education and other fields (76%). It was lowest among engineering graduates (34%).

The other industries that were large employers of doctoral graduates were professional, scientific and technical services (13%), health care and social assistance (13%), public administration (7%) and manufacturing (4%). No other industry accounted for more than 2% of employed graduates (see Appendix table A.19 for the complete list).

Industry of employment varied across the fields of study (Table 5). For instance, 13% of engineering graduates were employed in manufacturing and 28% of psychology and social science graduates were employed in health care and social assistance, though overall, these two industry sectors accounted for only 17% of all doctoral graduates in the class of 2005.

Table 5
Distribution of doctoral graduates by fields of study and industry of employment
Fields of study Manufacturing Professional, scientific and technical services Educational services Health care and social assistance Public administration
percent
All fields of study 4 13 56 13 7
Life sciences 4 14 51 19 8
Engineering 13 31 34 x 9
Computers, mathematics and physical sciences 7 18 56 4 7
Psychology and social sciences x 5 54 28 9
Humanities x 4 77 2 3
Education and other fields x 7 76 6 5
Standard table symbol
x suppressed to meet the confidentiality requirements of the Statistics Act
Note: Excludes unpaid workers, respondents still taking education credits and those outside the labour force.
Source: Statistics Canada, National Graduates Survey (Class of 2005).

Note

  1. Bayard, Justin and Greenlee, Edith. 2010. Graduating in Canada: Profile, Labour Market Outcomes and Student Debt of the Class of 2005. Statistics Canada Catalogue no. 81-595-MWE2009074, Ottawa, Statistics Canada and Human Resources and Skills Development Canada. 79 p.
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