Chapter 6
Discussion

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In this paper, broad educational pathways were organized according to three major criteria: (1) no post-secondary education, (2) direct route to post-secondary education, and (3) indirect route to post-secondary education. This typology allows for an analysis of the impact of a broad spectrum of educational pathways on youth labour market outcomes: from those who dropped out of high school to those with university degrees. Two important labour market factors (employment and earnings) were considered at two points in time following the exit from full-time schooling.

On the whole, the current findings suggest that pathways through the education system are various, but all are not equal in terms of labour market outcomes. In general, for this sample of young Canadian adults at age 26 to 28, the post-secondary-educated, especially those with a university degree, have the most successful labour market outcomes. This is not a novel finding, but perhaps the statement is too simplistic, because it ignores the differences between educational pathways. These important findings are discussed below with respect to the four research questions posed at the outset: (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 high school benefit high school leavers? (4) How do graduates of post-secondary programs compare to each other?

6.1 Do the effects of education on the labour market change over time?

In general, the rank ordering of educational pathways on labour market outcomes remains remarkably consistent across both time points, especially for earnings: earnings that were high initially after leaving school were high several years later, while earnings that were low initially remained low in relation to other pathways. At the same time, descriptive analyses revealed that employment rates and yearly earnings increased across all pathways as time out of school increased. Finnie's (1999) work using the National Graduates Survey (NGS) found a similar improvement over time in the labour market outcomes of post-secondary education graduates.

However, this improvement in the labour market over time turned out not to be significant in the multivariate models, once controlling for all other pertinent factors. For example, the likelihood of full-year employment in each pathway did not change significantly from Time 1 to Time 2. The opposite result was found for earnings, especially with regard to Gappers with a trade certificate or other type of diploma and Non-gappers with college diplomas. Youth in these two pathways saw the gap in their yearly earnings, compared to youth with a university degree, increase significantly over time after leaving school. In other words, some youth with trade certificates, other types of diplomas, and college diplomas may not be keeping pace with Non-gappers with university degrees several years after leaving school.¹ It should be noted, however, that these findings may not necessarily take into account the period of apprenticeship for individuals with trade certificates. Moreover, these results indicate that the factors resulting in increased employment and earnings over time are not related to simply waiting for time to pass – they are the results of factors that are already present after leaving school. Therefore, for example, young adults cannot simply wait and expect his or her chances of being employed to increase – they must try to adopt the characteristics of individuals who are more employable, regardless of age or time out of school.

6.2 Does taking time off after high school matter?

By and large, youth who entered directly into the post-secondary system had higher average employment rates and earnings, both initially and several years after leaving school. However, this descriptive finding does not remain consistent in the multivariate models once other pertinent factors are taken into account. For example, with regard to the university educated, at the initial time-point, there were no employment differences between university Gappers and Non-gappers; however, by the second time point, youth who had delayed going to university were significantly more likely to be employed for a full year than those who had gone directly after high school. The exact reason for this finding is unclear; however, some additional descriptive analyses (not shown) suggests that the reason may partly be related to the fact that university-educated Gappers worked more hours, on average, in high school. On the one hand, working in high school may have led to their delay in going on to post-secondary education; on the other hand, this early labour market experience may have proved valuable for later employment once they graduated from university.

With respect to earnings, when considering all educational pathways, initially the university advantage in the labour market was only afforded to youth who went directly to university following high school graduation. Multivariate models show that initially, Gappers with university degrees did not earn significantly more than youth without any post-secondary education credential; this includes youth who never finished high school. Thus, it appears that taking time off does matter, but the advantage in early entry into formal education beyond secondary school and the labour market becomes less important than professional experience over time.

Direct comparisons between the current findings and those in the literature are hampered by two factors: the first is with regard to the paucity of relevant research and the second is with regard to definitional differences. For instance, some recent work using the NGS found that post-secondary graduates who delayed the start of their post-secondary education programs following high school graduation received a premium in the labour market relative to graduates who went directly, even after considering factors such as experience and labour market connections (Ferrer and Menendez 2009). Yet, some earlier work in the United States found that young men who delayed their schooling received wage boosts that were smaller than their counterparts who had not delayed (Light 1995). These findings coupled with those from the current study suggest that the issue of 'taking a gap year' needs further refinement and study.

6.3 Does returning to school benefit high school leavers?

Descriptive analyses revealed that those who returned to high school after dropping out did not necessarily experience an improvement in their labour market outcomes compared to youth who dropped out and never returned; this is true at both time points.²

The separation of the 2nd Chance group led to an interesting finding: if these 2nd Chancers went on to post-secondary education, there was a clear positive impact on the labour market both in terms of employment and earnings. For example, the employment rates at Time 1 and 2 for 2nd Chancers with some post-secondary training were 59.1% and 82.8%, respectively. The comparable employment rates for 2nd Chancers with no post-secondary training were 55.1% and 64.7%, respectively. In other words, at the descriptive level, the gap between employment rates grew from 4 percentage points to 18 percentage points over time. This latter effect at Time 2 is quite robust as it remained significant in multivariate models as well (the effect at Time 1 did not remain significant in multivariate models), suggesting that it likely takes several years for the positive effect of post-secondary education to emerge in the labour market for youth who had ever dropped out of high school but who then returned, at least in terms of employment. Data from Australia and the United States support the finding that a couple of years out of school 2nd Chancers have similar labour market experiences as dropouts who never returned to school (Rumberger and Lamb 2003).³ Rumberger and Lamb (2003:362) suggest "that even if dropouts who complete high school have equivalent cognitive skills to high school graduates who never drop out, they may not have equivalent non-cognitive skills (e.g., perseverance) that lead to productive activity after high school. And even if they have greater cognitive skills than high school dropouts who never return, they may still be similarly deficient in non-cognitive skills that lead to investment in productive activity after high school."

Interestingly, even though on average 2nd Chancers with post-secondary training earned considerably more than their counterparts without any post-secondary training, the difference did not remain once important control variables were introduced. This was found at both time points. What these findings with respect to 2nd Chancers suggest is that the post-secondary experience is helping them gain a foothold in the labour market (especially at Time 2), but since earnings are more or less the same, the post-secondary training has not necessarily translated into better-paying jobs. Moreover, the earnings of 2nd Chancers still lag behind those of youth who never dropped out of school and then obtained a post-secondary education degree or diploma. This fact must be kept in mind when discussing the positive impact of completing a post-secondary education for 2nd Chancers, since even though their chances of employment have improved, they are still penalized for having dropped out in high school. The current findings however may not adequately take into account issues related to prior cognitive skills, the change in cognitive skills over time and also the job quality of 2nd Chancers; therefore, it is difficult to ascertain the real reason behind these current findings. These avenues remain for future research.

6.4 How do graduates of post-secondary programs compare to each other?

In terms of labour market outcomes, a distinction was noted between pathways culminating in a post-secondary degree or diploma versus those that did not. Are there significant labour market differences among the post-secondary educated? The short answer is 'it depends.' It depends on which outcome is measured, as well as time point and education level. For instance, no significant differences were noted for employment at the initial time point, except for Non-gappers who obtained a college diploma and then a university degree. These individuals had significantly greater odds of being employed for a full-year than any other pathway.

At the same time, at the initial time point, no significant earnings differences were found between the university educated and the other pathways culminating in a post-secondary education diploma or certificate. However, by the second time point 5 to 6 years after leaving school, an earnings difference was observed between youth with university degrees and other post-secondary education graduates. Thus, several years after leaving school, the earnings of the university educated (regardless of whether they were Gappers or Non-gappers) appear to be pulling ahead of all other educational pathways. This is echoed somewhat with respect to employment as well, except that differences are confined to Gappers with a university degree who have significantly greater odds of full-year employment than college graduates or graduates with a trade certificate or other type of diploma. The finding that a university education performs best in the labour market is aligned with other results from Canada (Ferrer and Riddell 2002) and internationally (Blundell et al 2005; Kerckhoff et al 2001). In addition, the current finding related to the growing university advantage over time is similar to figures from the 2006 Census, which showed that across successively older age groups, the average income of the university educated climbs much higher and faster than all other education groups.⁴ Importantly, however, the current paper, in line with previous research, confirms that early labour market outcomes for young adults with post-secondary credentials are very similar.

6.5 Where do we go from here?

The current paper has provided insights into the early labour market outcomes of young Canadian adults once they leave the education system. Moreover, this most recent cycle of the Youth in Transition Survey (Cohort B) has allowed for the examination of the links between educational pathway and labour market outcomes up to age 26 to 28. It would be interesting to follow this cohort for a longer time period, since we know that approximately 15% of the cohort was still in school at age 26 to 28 (Shaienks and Gluszynski 2009). By following them for a longer time period, it would be possible to more comprehensively describe the outcomes over time associated with the full range of educational paths, including those with graduate degrees since we know that the average age of students graduating from masters and doctoral programs was between age 30 and 35 in 2005/2006 (Bayard and Greenlee 2009; King, Eisl-Culkin and Desjardins 2008).

Also, having data at later ages would allow for analyses of members of this cohort who have returned to school for re-training after being in the workplace for several years. For example, we know from recent data from the Access and Support to Education and Training Survey (ASETS) that almost 50% of Canadians age 35 to 44 were in some type of education or training program in 2008 (Knighton, Hujaleh, Iacampo and Werkneh 2009) These individuals who are in their 30s or older who are in training or an education program are an important group for policy purposes since the evidence suggests many Canadians are taking the opportunity (voluntarily or involuntarily, due to the economic downturn) to return to the education system and re-tool their skills (Dowsett 2009; La Rose 2009).

Another natural extension of the current paper would be to loosen the restriction of 'highest level of education achieved' and instead focus upon all possible educational pathways. Re-focussing the analysis on this aspect would allow for the examination of pathways such as being enrolled in university after having completed a college diploma. Similarly, some youth may leave the university system to gain more applied job-ready training from colleges and trade schools. The current paper cannot assess this path given the current definition, which is based on highest level of education attained, which typically is defined as university completion.

Last, in the current paper, respondents were defined as taking time off after high school if they did not start a post-secondary program within four months of completing high school. However, this may be too short a time frame to assess whether there are any labour market costs or benefits associated with staying out of school between high school and the post-secondary system. There is sufficient variability in this dataset to undertake a more thorough examination of this phenomenon, since preliminary descriptive analysis revealed that close to 2000 Youth in Transition Survey (YITS) respondents (or about 20%) delayed going on to post-secondary studies by 5 to 15 months, while close to 1500 (or about 15%) delayed the start of their first post-secondary program by 16 months or more. Future work should take a closer look at labour market differences among those who go directly, those who go within one year and those who take longer than one year. Only then could we truly assess the impact of taking a 'gap year' on labour market outcomes.

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Note

1. This is not to say that this group is doing poorly over time; in real terms their wages increased significantly over the time period. The current result is in relation to the university educated only and should not be extrapolated beyond this.
2. Hango and de Broucker (2007) also found no differences between high school leavers and those who eventually returned to complete high school. Definitional differences between that paper and this one complicate direct comparisons, since the current paper was able to isolate two separate 2nd chance groups depending on eventual post-secondary education attendance. The earlier analysis by Hango and de Broucker was unable to make this separation since the YITS respondents were too young and too few had left full-time school.
3. Rumberger and Lamb (2003) however did not assess labour market outcomes for as long a time period as the current study.
4. See Statistics Canada and the Council of Ministers of Education (2007). Education Indicators in Canada: Report of the Pan-Canadian Education Indicators Program. Catalogue Number 81-582-XIE. Ottawa. Chart E.3.5. Average earnings/employment income, by age group and educational attainment, Canada, 2005. Updated December 16, 2008.