payoff - Drewes - e-brief E D U C A T I O N PAPERS The...

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e-brief EDUCATION PAPERS The Payoff: Returns to University, College and Trades Education in Canada, 1980 to 2005 By Daniel Boothby and Torben Drewes I N D E P E N D E N T R E A S O N E D R E L E V A N T August 24, 2010 Among OECD countries, Canada has the highest percentage of postsecondary graduates in the population 25-64 years old, which is due to having a large proportion of non- university postsecondary graduates from colleges and trade schools. By considering the financial returns to types of postsecondary education, which reflect demand and supply, this paper examines whether Canada has produced too many postsecondary graduates in general, or too many graduates from colleges or trade schools in particular. The answers to both questions is no. There are high rates of return to higher education, with the exception of women graduates of trade schools. The paper reflects the views of the authors and no responsibility for these views should be attributed to Industry Canada or the federal government. Drewes gratefully acknowledges research support from SSHRC, CMEC, and Statistics Canada through the CESC-SSHRC Education Research Initiative. The research and analysis are based on data produced by Statistics Canada. The opinions expressed do not represent the views of Statistics Canada. 1 OECD (2009) Table A1.1a, p.37. The Canadian data in both of these OECD tables are compiled from the Labour Force Survey, while our estimates below use Census of Population data. The methodological note for Canada (Annex 3, p.13, available at www.oecd.org/edu/eag2009) notes that the tertiary-B (community college) proportion of the population is inflated by some persons who should be classed as postsecondary, non-tertiary (trades). In any event, since Canada has the highest population proportion with tertiary-B diplomas and the highest proportion with postsecondary, non-tertiary diplomas, Canada certainly has the highest proportion of non-university postsecondary credentials. 2 OECD (2009) Table A1.3a, p.39. We have used the terms “postsecondary,” “college” and “university” in place of the OECD terms “tertiary,” “tertiary-type B” and “tertiary type-A and Advanced Research programs.” Canada is not alone among members of the Organisation for Economic Co-operation and Development (OECD) in subsidizing postsecondary education. However, unlike other OECD governments, Canadian governments support much higher levels of postsecondary training in colleges and trade schools relative to universities. Consequently, the educational composition of the working-age population in Canada also differs strikingly from that in other OECD countries, both in the high proportion of postsecondary graduates and the high proportion of community college graduates among them.
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