Chapter 4
Descriptive results

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4.1 Employment

4.1.1 Time 1 – 1 or 2 years after leaving full-time schooling

Table 4.1 shows labour market outcomes at both time points for each educational pathway. For full-time employment, we observe that the pathways that have the highest percentage employed 1 or 2 years after leaving school are Non-gappers who obtained a college diploma before also obtaining a university degree at 90%¹ and Gappers with a university degree at about 84%, followed closely by Non-gappers with a college diploma at 82.6% and Non-gappers with a university degree at 80%. In contrast, the path with the lowest proportion employed were the 2nd Chancers who eventually received their high school diploma (but not post-secondary education) at about 55%, followed closely by high school leavers and 2nd Chancers who eventually went to post-secondary education, at about 59%.

Interestingly, there appears to be only a slight difference between those who took a gap after high school versus those who did not, with Non-gappers faring marginally better. On average, across all Non-gappers, the employment rate was 79% and for all Gappers, it was 74%. The story is somewhat different, however, when examining the proportions employed for each type of educational pathway. For instance, Non-gappers who obtained a college diploma, and also those Non-gappers who left post-secondary education prior to obtaining a diploma or degree, had an employment rate about 5 percentage points higher than their Gapper counterparts. The reverse was observed, however, for the university educated: the employment rate for university-educated Gappers was about 4 percentage points higher than for Non-gappers, unless the university-educated Non-gappers obtained a college diploma prior to obtaining a university degree. This latter group experienced the highest employment rate of any path at Time 1.

Table 4.1 Proportion employed and average earnings, by educational pathway and number of years since leaving full-time school, same individuals over time

4.1.2 Time 2 – 5 or 6 years after leaving full-time schooling

Re-examining labour market outcomes several years after leaving full-time school allows for youth to more firmly establish themselves in the labour market. As a result, we may expect to observe different outcomes associated with the various educational pathways compared to those observed at the earlier time point. However, as shown in Table 4.1, similar patterns are evident in terms of stable employment at both Time 1 and Time 2; that is, rates of full-year employment were much higher for youth who were the most highly educated compared to those who at one point had dropped out of school and / or who had not taken any post-secondary education. For instance, approximately 96% of Gappers with a university degree worked for a full year, compared to 65% of 2nd Chancers with no post-secondary education training. In fact, to highlight the importance of post-secondary education, 83% of 2nd Chancers who have taken at least some post-secondary education (PSE) worked for 12 months 5 or 6 years after leaving school. This meant that full-year employment rates for 2nd Chance respondents with some post-secondary education training were, on average, about 18 percentage points higher than was the case for 2nd Chancers who never went beyond a high school diploma. This gap is largely the result of a 40% increase between Time 1 and Time 2 in employment for 2nd Chancers with post-secondary education and only a 17% increase for those without post-secondary education.

Moreover, across all pathways, except one, an increase in the employment rate was noted between Time 1 and Time 2: from a low of 6.07% for the High School Only path to a high of 40.07% for the 2nd Chancers with some post-secondary education. The lone exception is for Non-gappers who obtained a college diploma prior to obtaining a university degree. These individuals actually witnessed a slight decline in average employment rate over time. The fact that an increase in full-year employment for the great majority of pathways is found is an encouraging sign because it suggests that even among those groups that initially did not fare well, employment circumstances do improve over time (though they still lag far behind university graduates).

In terms of differences between Gappers and Non-gappers, generally speaking, the employment advantage accorded to Non-gappers at Time 1 had declined by Time 2. At Time 1, we observed about a 5.5 percentage-point difference between the two groups, but by Time 2 this had decreased to a less than 2 percentage-point difference. In contrast, differences remained for each individual pathway. For instance, Non-gappers with a College diploma still had close to a 5 percentage-point higher employment rate at Time 2, while the opposite is true for the university educated. In this case, the full-year employment rate for Gappers was about 7 percentage points higher than was the case for Non-gappers.

It is interesting to note as well that at Time 2, the employment gap between the university and college educated had increased, but only for youth who delayed going on to a post-secondary education program after high school. At Time 1, among Gappers, there was about a 7 percentage-point difference in the employment rate between university and college, but by Time 2, this difference had increased to close to 13 percentage points. Whether these differences remain after considering other factors in a multivariate analysis remains to be seen.

4.2 Earnings

4.2.1 Time 1 – 1 or 2 years after leaving full-time schooling

In terms of earnings at Time 1, the three highest earnings pathways, in order from the highest, are Non-gappers with a college diploma and a university degree, Non-gappers with a university degree, and Non-gappers with a Trade / Other type of certificate, with average earnings of $26,678, $25,177 and $23,369 respectively.² In contrast, the three lowest earnings pathways are (in order from lowest): 2nd Chancers, no post-secondary education, at $11,193, followed closely by high school droppers at $11,448, and 2nd Chancers with at least some post-secondary education, at $14,332. This last pathway is followed closely by youth with a high school diploma only at $14,587. Interestingly, at this early time point, there appears to be an earnings premium associated with post-secondary education for youth who had ever dropped out of high school, but then returned. The group that returned to complete their high school diploma and then went on to some type of post-secondary education earned approximately $3,100 more per year on average than the group that returned but only received a high school diploma. The most striking trend observed is the increase in earnings associated with pathways leading to post-secondary education diplomas or degrees. On average, these youth earned close to $23,000 per year initially after leaving school, an increase of about 33% compared to pathways including youth who had never completed a post-secondary education diploma or degree.³

As with employment, there does appear to be some benefit soon after leaving school of going directly from high school to post-secondary education: Non-gappers, on average, earned about $2,500 more than their Gapper counterparts. For instance, Non-gappers with a university degree earned about $2,600 more per year than Gappers with a university degree, while Non-gappers with a college degree earned about $3,000 more than their Gapper counterparts. The difference for those with trade or other types of certificate is smaller but still present, at about $1,800 per year. These average earnings suggest that at least initially, going directly to post-secondary education following high school completion may be beneficial for those eventually completing university, college or a trade / other type of program. Last, similar to findings reported by Allen and Vaillancourt (2004), the results also indicate that having a university degree leads to substantially higher earnings than does a college diploma at Time 1, approximately $3,000 more. This effect is present regardless of whether respondents took time off after high school.

4.2.2 Time 2 – 5 or 6 years after leaving full-time schooling

In terms of average earnings at Time 2, the highest levels are again observed for those pathways that led to the completion of a university degree: Non-gappers-University, Gappers-University and Non-gappers-College-University have the highest average earnings, at $43,958, $42,399 and $38,349, respectively. These three paths stand out much more when compared with the other pathways in a way which is different than that observed for employment. For example, the pathway with the next highest average earnings level after the Non-gappers-College-University path is Non-gappers-Trade / Other, at $33,379, followed closely by Non-gapper-College, at $32,057. In fact, the earnings gap between college and university graduates increased over time: at Time 1, individuals in pathways leading to a university degree earned, on average, $3,000 more than their counterparts with college diplomas; by Time 2, this difference had increased to an earnings advantage of close to $11,000.

At the opposite extreme, high school leavers, on average, earned the least, at $21,279, followed closely by 2nd Chancers with no post-secondary education, at $21,448. Thus, the rank ordering of earnings remains very consistent across time: what was high before remains high and what has low before remains low. It is promising to note, however, that each pathway experienced increased average earnings over time (Finnie 2001 had similar findings using the National Graduate Survey), which is not surprising given what we know about wage growth for the general Canadian public during this time period (see Lin 2008). However, even considerable growth in earnings for high school leavers (an 85% increase) did not begin to close the earnings gap with youth who had earned a post-secondary education diploma or degree.

When considering the impact of taking time off after high school, we observe that Non-gappers earned more than Gappers at both time points: at Time 1, Non-gappers earned, on average, $22,398 and Gappers earned $19,835. The difference remained very consistent across time, with Non-gappers earning $33,299 and Gappers earning $30,524 at Time 2. The differences are not uniform across pathways, however. For example, when considering education level, we note that between Time 1 and Time 2, the difference between Gappers and Non-gappers in average earnings for university graduates decreased by about $1000, while the gap between those with trade / other certificates increased by over $3500. Interestingly, for post-secondary education leavers at Time 1, there was only a $700 difference between Non-gappers and Gappers, but by Time 2, this difference increased sharply, with Gapper-post-secondary education Leavers on average earning about $3,800 more than Non-gappers-post-secondary education Leavers. This latter trend likely illustrates the better position afforded to youth who may have taken time off between high school and post-secondary education to work. In other words, they may be better able to function in the labour market several years after leaving school than youth who went directly to post-secondary education after high school because they may have some prior labour market experience to offset the lack of a completed diploma or degree program.

4.3 Summary of descriptive analysis

To summarize, the descriptive analysis leads to five key observations. First, similar to past research, this analysis also highlights the importance that attending a post-secondary institution has on labour market outcomes. Consistently, the pathways with either the lowest proportion employed full-year or with the lowest average earnings are those with a high school diploma or less. Second, this positive impact of post-secondary education attendance is consistent over time and is observed shortly after leaving school as well as several years later. Third, returning to complete high school after dropping out does not necessarily improve labour market outcomes compared to youth who dropped out and never returned. However, if these '2nd Chancers' went to post-secondary education, there was a clear positive impact in terms of both employment and earnings, especially several years after leaving school. Fourth, on average, Non-gappers appear to fare slightly better in the labour market both in terms of employment and earnings. There is, however, one important exception. At both time points, university-educated Gappers had higher employment rates than Non-gappers. At the initial time-point, the difference was negligible, at 4 percentage points; however, by Time 2, these university Gappers, on average, had an employment rate of 96%, while for university Non-gappers the employment rate was 89%. Fifth, university graduates earned more than college graduates, a trend which is observed at both time-points, but which increases by Time 2. Employment differences between these groups are less pronounced, except that at Time 2 for Gappers, when the university educated had over a 10 percentage-point advantage in the employment rate compared to Gappers with a college diploma.

In the next stage, the analysis is extended to include appropriate control variables in order to account for factors other than educational pathway that may have an effect on the relationship between education and labour market outcomes. This will help to determine whether the above relationships between educational pathways and the labour market hold once controlling for the influence of other factors.

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Note

1. This pathway is mostly concentrated in Quebec because of CEGEP. In some additional analyses (not shown), over 70% of Non-gapper-College-University pathway went to high school in Quebec.
2. The geometric mean is used because the earnings measures have been logged; interpretation is the same as with the more standard arithmetic mean.
3. Calculated by taking the average of all pathways leading to a post-secondary education degree or diploma, regardless of gap, and then comparing that to the average of the two pathways of post-secondary education Leavers.