Although Canadians are heading en masse towards postsecondary education, many people choose low paying sectors or ones with little demand for manpower. This is shown in the report Degrees of Success: The Payoff to Higher Education in Canada from Benjamin Tal, Deputy Chief Economist and Emanuella Enenajor, economist at the CIBC Bank.
While the proportion of post-secondary graduates among OECD countries is highest in the Canada, the share of those who earn less than the overall median income is also! This paradox is directly attributable to the choices made by future students when choosing their directions, according to the report’s conclusions. Canadians are more likely to choose a career to their taste rather than by financial necessity. The result is an unemployment rate among post-secondary graduates which is only 1.7% less than those who stopped after their secondary education.
An unprofitable return on investment
When calculating the “return on investment” on the basis of education, the report’s authors showed, unsurprisingly, that specialized and professional fields such as medicine, law or engineering are the most promising in terms of compensation. The least promising sectors, again unsurprisingly, are those of letters, humanities and social sciences. This does not prevent Canadians from filling the gap since a little less than half of young graduates are from these sectors. The phenomenon has also been observed in other countries such as the United States or Sweden. Only the field of business is an exception considered profitable and registering high and stable attendance over the last ten years.
Orientation strategy needing review
“Students who spend thousands of dollars for higher education can consider a university degree as an investment with initial costs and a series of future advantages”, says Mr. Tal. “Given that about half of undergraduate students have to go into debt to obtain their degree, a major proportion of the population enters the labour market with mortgaged financial health.” It is therefore essential that more students turn to growth sectors. To do this, the author believes that new trends related to market needs must be better identified, access to fairer education of improved quality and greater private investment.
Recognition of foreign degrees criticized
Finally, the report stresses the need to make the system for recognition of credentials of recent immigrants “simpler and more efficient”, by pointing to noteworthy salary differences. Today, a worker that has obtained a foreign business degree earns 40% less than someone who earned his qualification in Canada. In the engineering sector, this difference reaches 70%.