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Chapter A
The output of educational institutions and the impact of learning

A1. Educational attainment of the adult population
A2. Upper secondary graduation
A3. Tertiary graduation
A4. Labour market outcomes
A5. Economic benefits of education

A1 Educational attainment of the adult population

Context

This indicator provides a profile of the educational attainment of the adult population aged 25 to 64. A large proportion of people in this age range have completed their formal education; therefore, this indicator provides information on the stock of knowledge available to societies and economies. Data are presented by age group, indicating the distribution of educational attainment within this working-age population. Educational attainment reflects the highest level of education completed, based on the International Standard Classification of Education (ISCED) categories.1

Education helps give individuals the tools they need to participate in social and economic life and is key to the social and economic well-being of a country. The educational attainment of individuals in the labour force also influences the competitiveness and prosperity of economies. Variations in attainment over time reflect differences in access to education, and indicate the evolution of knowledge available to a society.

Observations

Educational attainment of Canada’s working-age population

In Canada, just over one-quarter (26%) of individuals aged 25 to 64 had an “upper secondary education” as their highest level of attainment in 2008; this represents the equivalent of secondary school completion (Table A.1.1). Similar proportions had finished programs in one of the postsecondary groupings under “tertiary education,” which corresponds to college and university in Canada. This indicates attainment at ISCED 5B or ISCED 5A/6 level:  24% and 25%, respectively. An estimated 12% of Canadian adults in this age range had “postsecondary non-tertiary education” as their highest level attained; this includes certificates or diplomas from vocational schools or apprenticeship training. Not surprisingly, the proportion with less than high school completion (ISCED 2) was low (9%), and the figure for those with Grade 8 or less (ISCED 0/1) as their highest level of education was even lower, at 4%. This overall portrait of educational attainment in Canada’s 25- to 64-year-old population is based on data from Statistics Canada’s Labour Force Survey.

Table A.1.1 Distribution of the 25- to 64-year-old population, by highest level of education attained based on international classifications, Canada and jurisdictions, 2008

Completion of secondary school or higher

A large majority (87%) of Canadians aged 25 to 64 had attained at least upper secondary education in 2008 (Table A.1.2). As expected, the highest proportion of individuals who had completed their education at this stage (92%) was recorded for the youngest age group, those aged 25 to 34. Among the adults aged 35 to 44 and 45 to 54, 90% and 86%, respectively, had at least secondary school completion. The figure for those in the oldest group in the range, the 55- to 64-year-olds, was 80%. Although still high, the contrast with the younger age group does indicate a gap between generations in Canada: 12 percentage points (Chart A.1.1).

Table A.1.2 Percentage of 25- to 64-year-old population that has attained at least upper secondary education, by age group, Canada and jurisdictions, 2008

Chart A.1.1 Population that has attained at least upper secondary education, by age group, 2008

Internationally, an overall comparison of educational attainment for the youngest (aged 25 to 34) and oldest (55 to 64) adults also reveals a higher proportion of secondary graduates among the younger generation, yet the gap is larger: 22 percentage points for the OECD average (Table A.1.2). Data from the OECD also reveal that several countries (Korea, Chile, Ireland, Greece, Spain, Portugal, Italy, Belgium, France, Australia, Finland, Luxembourg, Mexico, Denmark, Turkey, and Netherlands), posted intergenerational differences of 20 percentage points or more in 2008, while the gap was more modest (below 10 percentage points) in countries such as Czech Republic, Switzerland, Norway, and Germany. There was little difference between the two age groups in the United States.2 The fairly modest 12-percentage-point difference in Canada indicates that relatively higher stages of attainment had already been successfully achieved by the older generations. In fact, with 87% of its 25- to 64-year-olds having attained at least secondary school graduation in 2008, Canada, along with Switzerland and Poland, placed fourth among OECD countries, just behind the Czech Republic (91%), the Slovak Republic (90%), and the United States (89%).

There were relatively small differences between provinces in the proportion of adults aged 25 to 34 with at least a secondary school diploma; figures ranged from 88% in Manitoba to 93% in New Brunswick, Ontario and British Columbia (Table A.1.2). But the gap between the 25-to-34 and 55-to-64 age groups reveals greater provincial differences. This is certainly the case in Newfoundland and Labrador, New Brunswick, and Price Edward Island, which all registered a difference of 20 percentage points or more (Chart A.1.1). Differences of less than 10 percentage points were observed in Alberta and British Columbia. In the North, however, the differences between the 25-to-34 and 55-to-64 age groups were small.

Beyond secondary school completion

There are three categories of postsecondary attainment under “tertiary education” in the ISCED classification system (see “ISCED classifications and descriptions” in Notes to readers):  ISCED 5B (also known as tertiary-type B), ISCED 5A (tertiary-type A), and ISCED 6 (advanced research programs). In Canada, tertiary-type B includes non-university certificates or diplomas from community colleges, CEGEPs or schools of nursing, as well as university certificates below the bachelor’s level; tertiary-type A refers to bachelor and master’s degrees and other university degrees or certificates above a bachelor’s degree (but below a doctorate); and advanced research programs include doctorates and post-doctoral programmes. Due to some LFS limitations, ISCED 5A and 6 cannot be disentangled in Canada and the proportion recorded for tertiary-type B programs may be somewhat overestimated (see the “Definitions, sources and methodology” for this indicator).

In Canada in 2008, about half of adults aged 25 to 64 (49%) had completed some type of tertiary education (Table A.1.3). This proportion varies by age group, from 40% for 55- to 64-year-olds to 56% for the 25- to 34-year-olds, indicating a 16-percentage-point difference between generations (Chart A.1.2). The differences between the older and younger groups were fairly large in most jurisdictions, except for the Northwest Territories, Alberta, Manitoba and Saskatchewan, which all recorded differences of less than 10 percentage points. There was no difference between generations in terms of tertiary attainment in Nunavut, and the general pattern was reversed in Yukon.

Table A.1.3 Percentage of 25- to 64-year-old population that has attained tertiary education, Canada and jurisdictions, by age group, 2008

Chart A.1.2 Population that has attained at least tertiary education, by age group, 2008

One-quarter (24%) of working-age individuals in Canada had completed tertiary-type B programs, far greater than the average of 9% reported by the OECD for its 31 member countries (Chart A.1.3). Even if somewhat overestimated, the proportion observed for Canada nevertheless reveals a strength not seen in most other OECD countries. By contrast, the corresponding international figure for tertiary-type A/advanced research programmes was 21%, which compares with 25% in Canada.

Chart A.1.3 Proportion of the 25- to 64-year-old population with tertiary-type B (ISCED 5B) and tertiary-type A or advanced research programmes (ISCED 5A/6) education, 2008

Attainment at the tertiary-type B level was quite strong in the provinces and territories, ranging from 16% in Saskatchewan to 28% in New Brunswick. For tertiary-type A/advanced research programmes, the proportions ranged from 13% in Nunavut to 29% in Ontario.

Trends in educational attainment

Between 1998 and 2008, the proportion of adults aged 25 to 64 with less than secondary school completion decreased from 21% to 13% in Canada, with a slight drop from year to year (Table A.1.4; Chart A.1.4.1). Such steady declines for “below upper secondary” attainment are mirrored in the provinces, as well as on average for the OECD countries.

Table A.1.4 Trends in educational attainment among 25- to 64-year-old population, by highest level of education attained, Canada and jurisdictions, 1997 to 2008

Chart A.1.4.1 Proportion of the 25- to 64-year-old population with below upper secondary education, 1998 and 2008

Among 25- to 64-year-olds with upper secondary/postsecondary non-tertiary attainment, the proportion for Canada declined from 40% in 1998 to 38% in 2008 (Table A.1.4). Overall, however, the 10-year trend shows little variation, with slight ups and downs from province to province.

There was an overall rise in the proportions of individuals aged 25 to 64 who had completed their education at one of the tertiary levels (type-B or type-A/advanced research programmes). For Canada, the proportion of individuals in this group rose 11 percentage points between 1998 and 2008:  38% to 49% (Table A.1.4; Chart A.1.4.2). The comparable OECD averages were 21% and 28%, respectively.

Chart A.1.4.2 Proportion of the 25- to 64-year-old population with tertiary education, 1998 and 2008

Definitions, sources and methodology

This indicator examines the educational attainment of different age groups among Canada’s adult population aged 25 to 64, typically those of working age. It presents a portrait of the situation in 2008, but also shows the evolution over the past decade.

The percentage of the population represented by a given age group that has attained a particular education level is obtained by taking the number of persons in this age group who have received a diploma attesting to that level, dividing it by the total number of persons in this same age group, and then multiplying by 100.

The education level corresponds to the highest level of education an individual has attained. The designation of the different levels of schooling is based on the International Standard Classification of Education (ISCED-97) (see the “ISCED classifications and descriptions” and the “Mapping to ISCED” section for the LFS in Notes to readers). An individual must have successfully completed a programme at a given ISCED level to be considered as having attained that level of education. An individual who has not successfully completed a programme is assigned the preceding education level. For example, a secondary school graduate is considered to have attained ISCED level 3; a student who has dropped out, ISCED level 2.

The information presented for Canada on population and educational attainment is based on recent data from the Labour Force Survey (LFS), a monthly survey of approximately 50,000 households. The LFS seeks to obtain a detailed and timely picture of the labour force throughout the country. It allows proxy reporting, meaning that information on the entire household can be collected from a single member of the household. In all, this type of reporting accounts for approximately 65% of all information collected. Figures from the Organisation for Economic Co-operation and Development (OECD) are those reported by the OECD, and are drawn from OECD and Eurostat databases of the OECD, as compiled from national labour force surveys or registers.

Some limitations are encountered when using LFS data to examine and categorize educational attainment using ISCED, as it is not possible to make a precise delineation between “postsecondary non-tertiary education” and “tertiary-type B education programmes.” LFS data reported for the Canadian population that has attained ISCED level 5B will be somewhat overestimated because this category includes, for example, some CEGEP or college university transfer program graduates who, under the international system, would have been placed in ISCED level 4.

Note:   The corresponding OECD indicator is A1, To what level have adults studied?.

A2 Upper secondary graduation

Context

This indicator presents upper secondary school graduation rates, a key component in assessing the performance of education systems. Graduation rates are also often seen as a measure of student achievement. A comparison of overall rates gives some information about the extent to which school systems are succeeding in providing students with what is universally recognized as an important educational milestone. Presenting rates by sex reveals any gender differences, which can signal whether those systems are meeting the needs of both male and female students.

Upper secondary graduation is the foundation for further education, and it has become the norm for the majority of students. Historically, males had been much more likely to graduate from secondary school; however, that pattern has been reversed for many years in Canada and almost all other OECD member countries. Whether male or female, the value of graduating from high school also extends beyond the academic qualification by giving individuals what is now widely considered the minimum requirement for entry into the labour market.

Observations

Upper secondary graduation rates

Canada’s upper secondary graduation rate was 77% in 2007, based on the most recent data available for the country’s provinces and territories (Table A.2.1). The majority of other OECD member countries also reported graduation rates above 75%, and the latest OECD average (2008) was 80%. In the United States, the upper secondary graduation rate (77%) mirrored that for Canada, while the rate recorded for the United Kingdom (91%) was notably higher compared with both North American countries.3 Upper secondary graduation rates for 2007 varied across Canada, with figures of 70% or less recorded for Manitoba and Alberta, as well as for the territories. In the remaining provinces, rates ranged from 74% (Ontario) to 88% (Saskatchewan).

Table A.2.1 Upper secondary graduation rates, by programme destination, programme orientation and sex, Canada and jurisdictions, 2007

For the most part, the OECD upper secondary graduation rate increased slightly from year to year during the 2001-to-2007 period (Table  A.2.2). At the beginning of the decade, the OECD average rate was 77%; by 2007, 82%. In Canada, the corresponding rates for these two years show little change: 78% in 2001 versus 77% in 2007. There was, however, a slight rise in 2003, which reflects the province of Ontario’s “double-cohort” year, when the elimination of Grade 13 resulted in a much larger number of graduates.

Table A.2.2 Trends in upper secondary graduation rates (first-time), Canada and jurisdictions, 2001 to 2007

Rates higher for females

In Canada, the upper secondary graduation rate for females was 81%; the rate for males, 73%—a relatively large gender gap of 8 percentage points (Table A.2.1; Chart A.2.1). According to the latest figures provided by the OECD, the comparable average international rates were 84% and 76%, respectively, also revealing a female-male gap of 8 percentage points. The upper secondary graduation rates for females were higher than those for males in most OECD member countries (including Canada) for which comparable data were available. A few OECD countries (Germany, the United States, Japan and Korea) had quite small gender gaps, revealing a more balanced situation.

Chart A.2.1 Upper secondary graduation rates, by sex, 2007

Without exception, the female upper secondary graduation rates exceeded those for males in the provinces and territories (Chart A.2.1). Saskatchewan (92%), Quebec (92%) and Prince Edward Island (90%) had the highest female graduation rates for this level of educational attainment. Several provinces matched Canada’s female-male gap of 8 percentage points:  Saskatchewan, Prince Edward Island, New Brunswick, and Ontario. While the differences between the female and male upper secondary graduation rates are between 5 to 7 percentage points in Manitoba, Alberta and Nova Scotia, the gender differences were 10 percentage points or more in the remaining provinces and territories.

Rates by programme

In 2007, the total upper secondary graduation rates for virtually all provinces and territories—Quebec was the exception—reflect graduations from general programmes in high schools (Table A.2.1). Quebec was the only province to report graduates from pre-vocational and vocational programmes, recording a rate of 38% for both sexes in 2007. The Canada-level graduation rate for these programmes (8%) was thus entirely determined by Quebec’s unique and rather extensive vocational sector. While the female graduation rates for general programmes exceed those for males across the entire country, Quebec’s rates in the pre-vocational/vocational sector show a reversal of that pattern: 41% for males versus 34% for females.

Definitions, sources and methodology

This indicator presents upper secondary graduation rates with and without duplication according toprogramme destination, programme orientation, and sex. Rates with duplication count the number of diplomas awarded in a year, while rates without duplication only count individuals who had obtained, during a given year, a diploma at this level for the first time. Rates with duplication are calculated by dividing the number of individuals who, regardless of their age, have graduated by the total population at typical age of graduation. Rates without duplication are obtained by subtracting those individuals who have already graduated from another upper secondary programme from the total number of upper secondary graduates.4 In general, a graduate of upper secondary education is considered to have successfully completed the last year of education at this level, regardless of his or her age.

The typical age of graduation for Canada was determined to be between 17 and 18. The values used in the denominator for calculating the graduation rate are based on the average of the demographic estimates for these two ages.5

All data for Canada reflect the 2006/2007 school year; the OECD averages, 2007/2008. Information for Canada was drawn from the Elementary-Secondary Education Statistics Project (ESESP), an administrative survey that collects data from the provincial and territorial ministries/departments of education.6 To ensure comparability with other OECD countries, Statistics Canada estimated the number of graduates of private schools using the most recent data available for this sector (enrolments in 1999/2000). The number of private school graduates obtained in this way was then added to the number of public school graduates and included in the calculation of the secondary graduation rates presented.

The international figures used by the OECD are obtained from the UOE collection of statistical data on education, carried out jointly by three international organizations (UNESCO, the OECD, and Eurostat), and conducted in 2009 by the OECD.

Note:   The corresponding OECD indicator is A2, How many students finish secondary education and access tertiary education?.

A3 Tertiary graduation

Context

This indicator presents graduation rates for tertiary educational programmes, using the International Standard Classification of Education (ISCED) categories.7 First-time graduation rates are presented by sex for ISCED 5B and 5A tertiary programmes. Also presented are overall rates for the ISCED 6 category, which represents advanced research programmes.

Countries in which tertiary graduation rates are high are more likely either to have or to further develop a highly skilled workforce. Tertiary graduation rates depend on access to programmes and their structure, the different requirements for graduation, and the level of qualification required in the labour market. These rates may also be influenced by economic conditions when secondary graduates choose to defer postsecondary education to take advantage of employment opportunities. International students are also a factor because those who complete a tertiary programme inflate their host country’s graduation rate as they are counted as graduates, but not as part of the population.

Observations

5B and 5A first-time graduations

In Canada, the ISCED 5B (tertiary-type B) graduation rate, which includes only first-time graduates, was 26.4% in 2006—the most recent available data for this sector in Canada8 (Table A.3.1; Chart A.3.1). This overall rate for Canada far exceeds the latest comparable average available from the Organisation for Economic Co-operation and Development (OECD) for its member countries, estimated at 9.5% for 2008.9 This wide gap clearly indicates the strength of the tertiary-type B education sector in Canada, one seen in only a few of its fellow OECD countries (Japan, 27.2%; Ireland, 26.0%; New Zealand, 21.3%). It also partly explains why Canada’s first-time graduation rate for those university graduates categorized as ISCED 5A (tertiary-type A)10 may, at first glance, seem low in an international context. In 2007, Canada’s average graduation rate for tertiary-type A was 34.1%, approximately 4 percentage points lower than the most recent average of 38.0% registered by the OECD for 2008 (Table A.3.1; Chart A.3.2). This is not actually low, however, when taking into account the entire tertiary sector in Canada, where many postsecondary students choose to pursue tertiary-type B (mainly college) programmes. By contrast, in most OECD countries, students would be far less likely to have access to such programs and would therefore pursue tertiary-type A (university) programmes.

Table A.3.1 Graduation rates in tertiary education, by programme and sex, Canada and jurisdictions, 2007

Chart A.3.1 Tertiary-type B graduation rates (first-time graduation), by sex, 2007

These overall first-time graduation rates for ISCED 5B and 5A varied across the country. With its overall rate of 26.5% for tertiary-type B programmes, Ontario was on par with the average for Canada (Table A.3.1; Chart A.3.1). Prince Edward Island (39.1%), Quebec (34.1%) and Nova Scotia (31.6%) are the three provinces showing rates above the national average. With 54.4%, Nova Scotia had an especially high tertiary-type A rate, due in part to its many out-of-province students. With tertiary-type A graduation rates of 40.3%, New Brunswick and Ontario, along with Newfoundland and Labrador (37.6%) were the other provinces to exceed the 34.1% Canada average. There are no programmes at this level in the territories, and figures for the remaining provinces were all below the Canadian average, with rates ranging from 18.1% in Saskatchewan11 to 31.1% in British Columbia.

Chart A.3.2 Tertiary-type A graduation rates (first-time graduation), by sex, 2007

Gender gaps

Overall in Canada, the estimated first time graduation rate for women in ISCED 5B programs (32.2%) was higher than that for men (20.9%)—a rather sizeable gender gap of 11 percentage points (Table A.3.1; Chart A.3.1). The rates for tertiary-type A (43.2% for women versus 25.3% for men) reveal an even larger gap between the sexes: 18 percentage points (Chart A.3.2).12 The comparable OECD estimates for 2008 also reveal higher graduation rates for women overall. The average graduation rates for ISCED 5B programs were 10.7% for women, compared with 8.4% for men. For ISCED 5A, the rates were 45.9% and 30.4%, resulting in a 15.5-percentage-point female-male difference.

With the exception of Prince Edward Island, where the graduation rate for men in ISCED 5B programs was 46.3% (versus 31.8% for women), the rates for women were higher than those for men across the provinces (Chart A.3.1). And the tertiary-type A graduation rates for women were, without exception, above those for men across the country (Chart A.3.2).

Advanced research programmes

The rate of graduation from advanced research programmes was 1.1% in Canada in 2007, below the average rate of 1.4% for the OECD countries (Table A.3.1). Rates of graduation from such programmes ranged between 0.5% in Saskatchewan and New Brunswick to 1.3% in Quebec.

Definitions, sources and methodology

This indicator presents tertiary graduation rates by programme and sex. For the calculation of graduation rates, the OECD prefers to use the net method, which basically amounts to summing age-specific graduation rates. For countries that cannot report in this way because they are unable to provide such detailed data, including Canada, the OECD uses the gross method. This calculation divides the number of graduates, regardless of their age, by the total population at the typical age of graduation. An individual who obtains a degree in tertiary education during the reference year is considered a graduate.

Statistics Canada has determined the typical age at tertiary-type B graduation to be between 21 and 24, the typical age at tertiary-type A graduation to be between 22 and 25, and the typical age for obtaining a degree in advanced research programmes as between 27 and 29. The values used in the denominator for calculating graduation rates are based on the average of demographic estimates for these different age groups, based on the population estimates for the appropriate year.

OECD graduation rates are based on the first degree and therefore exclude individuals for whom the degree just obtained is a second degree within a given ISCED level. For ISCED 5B, the number of first college/technical CEGEP diplomas and university certificates or diplomas below bachelor was estimated by subtracting from the total number of this type of programme graduates during the reference year an estimate of the number of students for whom the diploma or certificate obtained was a second credential within this ISCED level. The same logic applies to ISCED 5A, where in order to meet the OECD’s standard definition, the number of first bachelor’s degrees was estimated by subtracting from the total number of bachelor’s degrees granted during the reference year an estimate of the number of students for whom the bachelor’s degree obtained was a second degree within this particular ISCED level. Both estimates were developed on the basis of the cohort of graduates interviewed in Statistics Canada’s 2007 National Graduates Survey(NGS) (class of 2005).

Data for Canada are presented for two different calendar years, based on the most recent data available through the Postsecondary Student Information System (PSIS): 2006 for ISCED 5B, and 2007 for ISCEB 5A and 6. PSIS is a census that collects data for all units in the target population, without sampling. The target population consists of Canadian public postsecondary educational institutions (universities, community colleges and vocational centres). Each institution provides Statistics Canada with data on its programmes, its students and the degrees granted.13 As not all institutions currently provide data to PSIS, results for some jurisdictions rely in part on estimates submitted to the institutions for validation. International data were obtained from the UOE exercise in which the OECD collected statistical data on education in 2008 and they reflect that calendar year.

Note:   The corresponding OECD indicator is A3, How many students finish tertiary education?.

A4  Labour market outcomes

Context

This indicator examines the connection between educational attainment and the labour market by looking at employment rates among the adult population aged 25 to 64. This relationship is explored by sex, and trends in employment rates by attainment are also presented. Educational attainment reflects the highest level of education successfully completed, based on the International Standard Classification of Education (ISCED) categories.14

One of the main objectives of education systems is to prepare individuals so they can participate in a knowledge-oriented economy and society. For individuals, job prospects and employment rates both generally improve with higher education.

Observations

Upper secondary graduation minimum requirement

In Canada, the overall employment rate for adults aged 25 to 64 was 77% in 2008 (Table A.4.1). This compares with a rate of 74%, on average, for the OECD countries.15 In the provinces, the overall employment rate for 25- to 64-year-olds ranged from 64% in Newfoundland and Labrador to 83% in Alberta. All 2008 figures for Canada are based on data collected by the Labour Force Survey (LFS).

In OECD countries, upper secondary graduation is considered the minimum requirement for finding a good job and being competitive in the labour market. Thus, employability, judged on the basis of the employment rate (the ratio of the number of persons with a job in a given group to the total population of that group), increases with the amount of education attained. This relationship is evident in Canada, where in 2008, the employment rate for those who had not completed upper secondary education was 58%, while the rate for upper secondary and postsecondary non-tertiary graduates was 77%, and the figure for tertiary graduates, 83% (Table A.4.2). Across the country, variability in the employment rate for the “below upper secondary” category is evident, with figures ranging from 39% in Newfoundland and Labrador to 71% in Alberta.

Employment rates by sex

The rise in employment rates seen when educational attainment is reviewed across ISCED categories occurs among both men and women, although the rates for women are consistently lower than those recorded for men. In 2008, Canada’s employment rate for women aged 25 to 64 was 72%, compared with 82% for men in the same age range (Table A.4.1; Chart A.4.1). This compares with OECD averages of 65% and 83%, respectively. In Canada, the rate for women was above the national average in half of the provinces: Ontario (73%), Prince Edward Island (74%), Manitoba (75%), Alberta (76%) and Saskatchewan (77%). With an overall employment rate of 60% for women, Newfoundland and Labrador was the only province with a rate well below the Canada and OECD (65%) averages.

Table A.4.1 Employment rates of 25- to 64-year-olds, by highest level of education attained and sex, Canada and jurisdictions, 2008

Chart A.4.1 Employment rates of 25- to 64-year-olds, by highest level of education attained and sex, 2008

In the majority of OECD countries in 2008, the difference in employment rates between the sexes was less pronounced among graduates of tertiary-type A and advanced research programmes compared with the upper secondary graduates (the OECD averages can be seen in Table A.4.1, columns 8 and 5). In Canada, a 12-percentage-point difference was observed between men and women in the upper secondary graduation category (Chart A.4.1). The male-female difference was half as large (6 percentage points) for graduates of tertiary-type A/advanced research programmes.

Postsecondary education, higher employment rates

Across Canada, as in other OECD countries, 25- to 64-year-old individuals with postsecondary education had consistently higher employment rates than those who had not graduated from secondary school. At the Canada level, the difference between the employment rate for tertiary graduates (83%) and the rate for those with less than upper secondary education (58%) was substantial in 2008:  25 percentage points (Table A.4.2; Chart A.4.2). A similar gap (26 percentage points) is seen at the international level, as indicated by the most recent OECD averages for this 25- to 64-year-old group. Among the provinces, the difference between employment rates for these two education categories ranged from 14 percentage points in Alberta to 38 in Newfoundland and Labrador.

Table A.4.2 Trends in employment rates of 25- to 64-year-olds, by highest level of education attained, Canada and jurisdictions, 1997 to 2008

Chart A.4.2 Employment rates of the 25- to 64-year-old population, by educational attainment, 2008

The relationship between educational attainment and improved employment prospects is evident in the narrowing of the gap when the employment rate for those with tertiary completion is compared against the rate for individuals in the “upper secondary and postsecondary non-tertiary” category. In 2008, the rates were 83% and 77%, respectively, revealing a much more modest gap of 6 percentage points (Table A.4.2). The difference varied from province to province, with the largest gap (12 percentage points) noted for Newfoundland and Labrador, and the smallest (less than 1 percentage point) in Alberta. This slight difference in Alberta indicates that, in this particular province, individuals with a certificate or diploma from a vocational school or with apprenticeship training are as likely as people with a college or university diploma to be employed.

10-year trends

The difference in the employment rates for tertiary graduates and individuals without upper secondary graduation narrowed slightly in Canada between 1998 and 2008, decreasing from 29 percentage points to 25 (Table A.4.2). In the provinces, these gaps also tended to get smaller over time. This trend was most marked in British Columbia, where the difference between the two rates declined from 29 percentage points to 20. It is noticeable that such reductions in the gap have been totally attributable to rising employment for the less educated in the years of substantial and stable economic growth. These decreases arose from the rise in employment among those without upper secondary graduation.

Definitions, sources and methodology

This indicator, labour market outcomes, examines the relationship between educational attainment and the employment rates of 25- to 64-year-olds, overall and by sex, and provides insight into how this relationship has evolved over a 10-year period. The employment rate represents the percentage of employed people in this working-age population. To calculate the employment rate for a group with a particular level of educational attainment, the number of employed persons is divided by the total number of persons in the population aged 25 to 64 who have attained the education level and then multiplying this quotient by 100.

Persons considered to have a job are those who, during the reference week: (1) worked at least one hour in exchange for a wage or some benefit; or (2) had a job but were temporarily absent from work for various reasons (illness, accident, vacation, labour dispute, training, maternity or parental leave, etc.). The education level is measured according to the highest level of education attained.

The data for Canada were drawn from the Labour Force Survey (LFS), a monthly survey of approximately 50,000 households. The LFS excludes the following from the scope of the survey:  individuals who live on reserves or in other Aboriginal settlements in the provinces, full-time members of the Canadian Forces and institutional residents. The LFS employment rate is based on a monthly average from January to December. Figures from the Organisation for Economic Co-operation and Development (OECD) are those reported by the OECD, and they are extracted from the OECD and Eurostat databases compiled from national labour force surveys for the OECD member countries.

Note:  The corresponding OECD indicator is A6, How does participation in education affect participation in the labour market?.

A5  Economic benefits of education

Context

This indicator focuses on the economic benefits of education by examining the relationship between educational attainment and earnings from employment. Relative earnings for the population aged 25 to 64 are presented by age group, for men and women, and over time, according to the highest level of education completed. Trends in the differences in earnings of men and women are also presented; specifically, the average annual earnings of women as a percentage of those of men. Educational attainment is based on the International Standard Classification of Education (ISCED) categories.16

A comparison of earnings according to educational attainment gives individuals an idea of the potential monetary rewards associated with higher education. Major differences in earnings can clearly signal the advantages—or disadvantages—related to completion at the various levels of education.

Observations

Earnings from employment by educational attainment

The relative earnings of Canadians aged 25 to 64 clearly indicate that mean annual earnings from employment (before tax) rise along with educational attainment. Statistics Canada’s 2007 Survey of Labour and Income Dynamics (SLID) reveals the economic penalty encountered by the individuals who had not completed high school (those in the “below upper secondary” category), along with the benefits for those who had successfully completed programs at the postsecondary levels (Table A.5.1; Chart A.5.1). The most notable earnings advantage is seen among those who had graduated from university programs, shown as ISCED 5A/6 (tertiary-type A or advanced research programmes) (see the “Mapping to ISCED” table for SLID in the Notes to readers section of the report). These graduates earned considerably more in 2007 than people at other levels of educational attainment, with earnings that were 75% higher, on average, than earnings of graduates of upper secondary or postsecondary non-tertiary programs (see the “Definitions, sources and methodology” for this indicator for an explanation of the reference group).

Table A.5.1 Relative earnings of 25- to 64-year-olds with income from employment, by highest level of education attained, age group and sex, Canada and provinces, 2007

Chart A.5.1 Relative earnings of 25- to 64-year-olds with income from employment, Canada and OECD, by highest level of education attained, 2007 (upper secondary and postsecondary non-tertiary education = 100)

The pattern seen in Canada is also evident internationally, according to recent estimates from the Organisation for Economic Co-operation and Development (OECD).17 Again, relative earnings for the working-age population rise across the categories of education, and, like their counterparts in Canada, tertiary graduates in the other OECD countries earned considerably more than upper secondary and postsecondary non-tertiary graduates in 2007. Their earnings were, on average, 53% higher (Table A.5.1). However, the Canadian and international pictures begin to differ starting at the ISCED 5B level, where the OECD earnings premiums are higher—almost double the advantage seen for Canada (22% versus 12%) (Chart A.5.1). Then a “crossover” is seen when comparing the figures for individuals aged 25 to 64 who graduated from tertiary-type A or advanced research programmes. For this category, the OECD cites an earnings advantage of 64% for its member countries overall, indicating a rather high earnings premium for those who have completed such university programmes. In this case, however, the earnings advantage noted in Canada (75%, as previously mentioned) is even higher.

When earnings differentials are examined over time, the pattern of higher earnings for working-age individuals with tertiary education remained fairly stable in Canada. In 1998, the 25- to 64-year-olds in this group earned 40% more on average than those with upper secondary and postsecondary non-tertiary education, which compares with the 42% advantage recorded for 2007 (Table A.5.2). 

Table A.5.2 Trends in relative earnings for 25- to 64-year-olds, by highest level of education attained, Canada and provinces, 1998 to 2007

In the provinces

Across the provinces, the relative earnings among the 25- to 64-year-old population reflect the patterns seen at the Canada level; however, as expected, there are a few variations. The earnings disadvantages associated with “below upper secondary education” are apparent in all provinces, although less so in British Columbia, where individuals in this category earn about 3% less than those who have successfully completed upper secondary or postsecondary non-tertiary programs (Table A.5.1; Chart A.5.2). Among individuals aged 25 to 64 who had successfully completed a university education (shown under ISCED 5A/6: tertiary-type A and advanced research programmes), earnings were notably higher in all provinces. In Ontario, Quebec, Newfoundland and Labrador, and New Brunswick, individuals in this category earned, on average, between 81% and 103% more than those who had either upper secondary or postsecondary non-tertiary as their highest level of attainment—beyond the 75% for Canada overall. In British Columbia, Saskatchewan and Alberta, these earnings premiums for university graduates are also evident, but the differentials are not as large and the earnings premiums for individuals with other types of education reflect the stronger labour markets in these provinces.

Chart A.5.2 Relative earnings of 25- to 64-year-olds with income from employment, by highest level of education attained, 2007 (upper secondary and postsecondary non-tertiary education = 100)

Men and women—differences in earnings

When trends in the differences between the earnings of men and women are examined, women—even those who had successfully completed some type of tertiary education (college or university)—have not fared as well as their male counterparts. Between 1998 and 2007, the average annual earnings of women as a percentage of those for men reveal that women have continued to earn much less, regardless of their level of education. Women in the “below upper secondary” educational attainment category were especially penalized over the period, earning about 50% less, on average, than the men who had not completed high school (Table A.5.3; Chart A.5.3).18 Even women who had successfully completed a program at the tertiary level earned far less than the men with the same type of educational attainment. In 1998, the average annual earnings for women with tertiary education were 61% of those for men; by 2007, the gender gap had narrowed slightly, yet women’s earnings were still only 63% of those for men. But, even if earnings for men are consistently higher than those for women at every level of educational attainment, the narrowing of the gap as level of education increases indicates that the monetary gains from additional education are relatively higher for women.

Table A.5.3 Trends in differences in earnings of men and women, 25- to 64-year-olds with income from employment, by highest level of education attained, Canada and provinces, 1998 to 2007

Chart A.5.3 Trends in differences in earnings of men and women, by highest level of educational attainment, 1998 to 2007

Definitions, sources and methodology

This indicator focuses on the economic benefits of education by examining the relationship between educational attainment and relative earnings among the 25- to 64-year-old working-age population, by age and for each sex. It also shows how this relationship evolved between 1998 and 2007.

Relative earnings are the mean annual earnings from employment (before tax) of individuals with a certain level of educational attainment divided by the mean annual earnings from employment of individuals whose highest level of education is upper secondary or postsecondary non-tertiary, multiplied by 100.

The estimates are limited to persons with employment income during the reference period. The average for both sexes is not the simple average of the figures for males and females, but rather an average based on the employment income of the total population. For this reason, there may be instances when the average for both sexes does not fall between the value calculated for men and that calculated for women. This phenomenon can be seen in Canada’s figures for total tertiary education in Table A.5.1. In this case in particular, the relative earnings figure for men aged 25 to 64 with upper secondary or postsecondary non-tertiary education (the reference category; not shown) was $44,697 in 2007. This same year, the relative earnings figure for men this same age who had tertiary education was $65,299, resulting in an index of 146 [($65,299 / $44,697) * 100)]. For women, relative earnings were $28,313 for the reference category and $41,174 for the tertiary group; an index of 145. For both sexes combined, the relative earnings were $37,306 for the reference category and $52,951 for tertiary; index of 142. In this example, the index value for both sexes (142) is below that obtained for men (146) and that for women (145), even if the average earnings values for both sexes for both the reference group ($37,306) and the tertiary group ($52,951) fall between the figures for men ($44,697, reference category; $65,299, tertiary) and those for women ($28,313, reference category; $41,174, tertiary).

Data for Canada were obtained from the Survey of Labour and Income Dynamics (SLID), a longitudinal household survey. SLID excludes inhabitants of Yukon, the Northwest Territories and Nunavut, institutional residents and persons living on Indian reserves. Overall, these exclusions amount to less than 3% of the population.

Note:   The corresponding OECD indicator is A7, What are the economic benefits of education?.

 


Notes

  1. Please see the “ISCED classifications and descriptions” section in this report’s Notes to readers for brief descriptions of the ISCED categories.
  2. The international data presented in this report reflect the figures available from the OECD at the time of writing; however, the OECD may have made further final adjustments that could not be reflected here. For more detailed information on the latest international statistics, please refer to Education at a Glance 2010: OECD Indicators, available on the OECD’s Web site: www.oecd.org.
  3. The international data presented in this report reflect the figures available from the OECD at the time of writing; however, the OECD may have made further final adjustments that could not be reflected here. For more detailed information on the latest international statistics, please refer to Education at a Glance 2010: OECD Indicators, available on the OECD’s Web site: www.oecd.org.
  4. The methodology used to produce the numbers for Canada and the provinces/territories may differ from that used in a particular province/territory; consequently, the numbers in this report may differ slightly from those published by the provinces/territories.
  5. Upper secondary graduation rates may exceed 100% because they are calculated by dividing  (1) the number of individuals who, regardless of their age, have graduated, by (2) the total population at typical age of graduation  These rates should not be used to discuss upper secondary drop-outs.
  6. Data on graduations from some secondary programs are not uniformly available across jurisdictions, and general education diplomas (GED), adult basic upgrading and education, and graduation from adult day school, which take place outside regular secondary school programs, are, in most instances, not included.
  7. Please see the “ISCED classifications and descriptions” section in this report’s Notes to readers for brief descriptions of the ISCED categories.
  8. This category includes students who graduated for the first time from a typical community college program, a technical CEGEP program, or those who obtained, always for the first time, an undergraduate level certificate or diploma (more details are available in this indicator’s “Definitions, sources and methodology” section, as well as under “Mapping to ISCED” for the “Postsecondary Student Information System (PSIS)” in the Notes to readers section of this report).
  9. The international data presented in this report reflect the figures available from the OECD at the time of writing; however, the OECD may have made further final adjustments that could not be reflected here. For more detailed information on the latest international statistics, please refer to Education at a Glance 2010: OECD Indicators, available on the OECD’s Web site: www.oecd.org.
  10. This category includes students who obtained a bachelor’s degree for the first time (more details are available in this indicator’s “Definitions, sources and methodology” section, as well as under “Mapping to ISCED” for the “Postsecondary Student Information System (PSIS)” in the Notes to readers section of this report).
  11. Since 2005/2006, graduates from the University of Regina, in Saskatchewan, are not available through PSIS, which, of course, affects the ISCED 5A and 6 graduation rates for Saskatchewan and, more marginally, the national rates as well.
  12. Given the differences in the number of women and men enrolled in colleges and universities in Canada, the female-male gaps seen in first-time graduation rates for tertiary-type B and tertiary-type A programmes are expected, a situation also found in a number of OECD countries.
  13. Since 2005/2006, graduates from the University of Regina, in Saskatchewan, are not available through PSIS, which, of course, affects the ISCED 5A and 6 graduation rates for Saskatchewan and, more marginally, the national rates as well.
  14. Please see the “ISCED classifications and descriptions” section in this report’s Notes to readers for brief descriptions of the ISCED categories.
  15. The international data presented in this report reflect the figures available from the OECD at the time of writing; however, the OECD may have made further final adjustments that could not be reflected here. For more detailed information on the latest international statistics, please refer to Education at a Glance 2010: OECD Indicators, available on the OECD’s Web site: www.oecd.org.
  16. Please see the “ISCED classifications and descriptions” section in this report’s Notes to readers for brief descriptions of the ISCED categories.
  17. The international data presented in this report reflect the figures available from the OECD at the time of writing; however, the OECD may have made further final adjustments that could not be reflected here. For more detailed information on the latest international statistics, please refer to Education at a Glance 2010: OECD Indicators, available on the OECD’s Web site: www.oecd.org.
  18. Although earnings for women are lower than those for men, the difference may result from a variety of factors; for example, larger proportions of women working part time, a different mix of occupations with different rates of pay.