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    Labour Market Experiences of Youth After Leaving School: Exploring the Effect of Educational Pathways Over Time

    Labour Market Experiences of Youth After Leaving School: Exploring the Effect of Educational Pathways Over Time

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    Chapter 1
    Introduction and background literature

    Numerous studies have examined educational pathways in Canada over the past several years. Most recently, Doray, Picard, Trottier and Groleau of the Canada Millennium Scholarship Foundation (2009) conceptualized educational pathways from three different paradigms: the selectivity of the education system, the complexity of educational pathways, and finally, in the context of transitioning into adulthood. All three are important conceptual starting points in any analysis of the pathways youth take through the education system. While the selective nature of the system is important in its own right, the latter two conceptual paradigms are of more interest for the current study. For example, there is not a single common path that youth follow through the education system: some youth go directly from high school to the post-secondary system, while others delay, while still others remain out of the post-secondary system entirely. Moreover, at the same time that individuals pass through the education system, they also usually enter one or more phases marking the transition to adulthood. They may be leaving the parental home, starting their own families (having children and/or forming conjugal relationships), as well as entering the workforce, or at least thinking of their employment options once they leave the education system. The role that education plays in this regard therefore is crucial as it impacts the transition to adulthood.

    We know that by the mid- to late 20s, much of the educational transition has been completed and a significant majority of these young adults are now in the work force. For instance, using data from Youth in Transition Survey (YITS), Shaienks and Gluszynski (2009) found that among the cohort of youth aged 18 to 20 years in 2000, approximately 70% of them were not in school and were working full-time as of December 2007, at age 26 to 28 years. Moreover, the 20s are a time of great change and longitudinal data are needed to study important changes and processes. Cooksey and Rindfuss (2001: 733) summarize the processes during this phase of the life course by suggesting that "[b]y the time young men and women reach their middle 20s, they have already experienced diverse life histories, in terms of their family backgrounds and their work, education, marriage, and family formation pathways since leaving high school." Lives are lived not in discrete segments, but simultaneously, and the decisions made to undertake or forgo education can impact upon other facets of life.

    One such facet of life is socioeconomic well-being. We know that significant markers of socioeconomic success are employment and earnings all across the life course, including during young adulthood. During young adulthood, individuals have a steep earnings trajectory which is inextricably linked with education (Luong and Hébert 2009). Moreover, the linkage between education and socioeconomic status over the long run has been well documented. For instance, Chen and Caplan (2003) found both direct and indirect effects of early school failure on socioeconomic well-being in early adulthood.

    With regards to education, several factors emerge as pertinent when considering the pathways young people take through the education system. The first involves whether youth have ever dropped out of high school. These individuals can be greatly hampered in the labour market, initially and over the long-term, especially if they never returned to school. We know, for example, the difficulties that those with low education face (Chen and Caplan 2003; de Broucker 2005a,b and Hango and de Broucker 2007; Rumberger and Lamb 2003). They are more likely to be underemployed; if they are employed, they work in very low wage sectors of the economy. Yet, it is important to consider the impact of returning to high school for those who once had dropped out (Looker and Thiessen 2008). These high school leavers may be able to gain some lost ground in the labour market through the eventual completion of a diploma or further training (Hamil-Luker 2005; Rumberger and Lamb 2003). Palameta and Zhang (2006) found for instance that going back to school, or adult education more generally, does pay off in the labour market, but only for those who receive a post-secondary certificate.

    A second pertinent factor involves whether youth followed a direct path through the education system or whether they delayed entry to post-secondary education following the completion of high school. There is a growing body of literature that explores the 'gap' year where youth do not go directly to post-secondary studies following completion of a high school diploma. While the 'gap' year is more common in countries such as Australia and the United Kingdom (Heath 2007; Jones 2004), it is also becoming common in Canada (Canadian Council on Learning 2008; Hango 2008). While there is still some debate as to whether taking time off is positive or negative, some past research suggests that 'gappers' are less likely to re-enrol in post-secondary programs and eventually obtain a university degree (Bozik and DeLuca 2005); this in turn could perhaps have longer term implications for their future earnings. Light (1995) for instance found in the United States that individuals who delayed their schooling received wage increases that were smaller than those received by their counterparts who did not delay their schooling. Yet Hango and de Broucker (2007), as well as Dubois (2007) found no significant labour market differences between those who delayed going to a post-secondary program and those who did not. Using the National Graduate Survey, Dubois (2007), in fact, found that college and university graduates who delayed had higher earnings two years after graduation. However, definitional differences plague the research in this area and it is not known whether there is an optimal amount of 'gap' time between high school and post-secondary training.

    A third and widely studied aspect of the link between education and the labour market concerns the highest level of education achieved (see Card 1999 for a review of the literature on linking economic factors with educational attainment). The longstanding human capital approach from economics suggests that higher levels of education and the acquisition of knowledge and skills raise the value of an individuals' human capital which in turn is used in the labour market (Becker 1964). Additionally, Blau and Duncan's (1967) status attainment model, which posits that a strong relationship exists between education, occupation and labour market outcomes, has had a long tradition in the sociological literature (see Kerckhoff, Raudenbush and Glennie 2001, for an example comparing different theoretical approaches). By and large, however, regardless of theoretical approach taken, a consistent finding across Canada and other countries is that individuals with university degrees have the highest rates of return in the labour market (Blundell, Dearden, Sianesi 2005; Ferrer and Riddell 2002; Kerckhoff et al 2001).

    Apart from the importance of education in the labour market, numerous other pertinent factors exist. For instance, it is necessary to consider gender due to the different paths through the education system and the different experiences of men and women in the labour market (Bobbitt-Zeher 2007; Frenette and Coulombe 2007). Moreover, place of birth and parental education are also important (Caspi, Wright, Moffitt, and Silva 1998; Ferrer and Riddell 2008), especially given the importance of immigrant adaptation to the host country and the domains of work and education, as well as the influence of parental educational attainment.

    In addition, many factors during high school impact upon later education and the labour market; two, in particular, are working during high school and average marks. Previous work has documented the relationship between working in high school and later labour market outcomes (Krahn, Lowe and Lehmann 2002; Leventhal, Graber and Brooks-Gunn 2001; Marsh and Kleitman 2005). On the one hand, it is argued that work experience gained in high school provides youth with valuable lessons on responsibility as well as perhaps signalling to future employers that they are serious, committed and responsible. However, working during high school is at odds with high school completion as it has been linked with low educational outcomes, but only at very high levels (Sunter 1993), while low to moderate levels are actually beneficial (Ruhm 1997). Moreover, academic marks are strongly linked with post-secondary attendance since many programs require a certain minimum average grade level in order for students to be considered for admittance; however, the direct link with later labour outcomes is less clear. Yet, some interesting work from Green and Riddell (2001) found that higher academic ability, as measured by reading and math test scores, is positively associated with future earnings.

    Last, several contemporaneous factors present at around the same time as an individual enters or remains in the labour market are also important. Specific factors that affect ones' involvement in the labour force are centered on geographic, family and individual factors. In terms of geography in Canada, the province where one lives impacts upon earnings and employment as not all regional labour markets are the same (Sharan 2000). Moreover, living in areas of different population size can also impact upon labour force status (Vera-Toscano, Phimister, and Weersink 2004). In terms of family factors, the two most important for the labour market are presence of child(ren) in the household and marital status. Children often have a negative impact on labour market participation, especially for women (Zhang 2009), while being married has also been linked with negative labour experiences, albeit through its connection with childbearing. Last, individual characteristics such as a person's age and the presence of a physical or mental condition can affect labour market outcomes (Knapp, Perkins, Beecham, Dhanasiri, and Rustin 2008).

    1.1 Goals and research questions

    The goals of this report are threefold:

    1. To build on prior work by Hango and de Broucker (2007), which used Cycles 1 through 3 of the Youth in Transition Survey (YITS). They studied the impact of educational pathway on very early labour market outcomes when youth in the YITS-B cohort were aged 22 to 24. The recent release of Cycle 5 data allows for the study of the relationship between education and early labour market outcomes over a longer time period, with data for youth at age 26 to 28 years old.
    2. To measure labour market outcomes over time. Labour market assessment is needed over time to help fully explain the transition to employment and careers of Canadian youth. Finnie (1999, 2001), for instance, has suggested that adaptation to the labour market is a process and as such, the transition should be studied at more than one time point. Similarly, Thomas and Zhang (2005) also assessed labour market outcomes at two points in time.
    3. To examine the link between education and labour market outcomes across the entire educational spectrum. Analyses using the National Graduate Survey only consider graduates from post-secondary programs (Finnie 1999, 2001; Thomas and Zhang 2005). This supplies an incomplete picture of early labour market success, however, because the full range of educational pathways youth take to the labour market is not captured. In fact, it ignores some of the most vulnerable young adults in society: those who have a high school diploma or less. While this group has become smaller over time in Canada, they remain a very vulnerable population (de Broucker 2005a).

    Four main research questions are addressed in this study, each are influenced by the three goals listed above, and all relate to how educational pathways impact upon the labour market outcomes of Canadian youth:

    1. Do the effects of education on labour market outcomes change over time?
    2. Does taking time off after high school matter?
    3. Does returning to school benefit high school leavers?
    4. How do graduates of post-secondary programs compare to each other?

    The next section describes the data, methods and study design as well as specifying the modelling strategy before discussing results, which are split into three parts: descriptive; predicting the likelihood of full-year employment (using logistic regression); and predicting the log of yearly earnings (using ordinary least squares regression). All analyses are carried out 1 or 2 years after and 5 or 6 years after leaving school on a full-time basis.

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