As most of this year's crop of university graduates will soon find out, a university education has retained its value in the labour market. Will this surprise them? Likely so given the attention to reports of underemployment among university grads and narrowing earnings between high school and postsecondary grads.
Not only is a university education worth as much as it ever has been, compared to 1991, today's youth are more likely to be working in higher-skilled occupations typically requiring a university degree. In spite of a large increase in the number of university graduates over the last two to three decades, the proportion of grads in jobs classified as not requiring a university degree has not changed. These are the positive conclusions reached by a Statistics Canada study this spring.
If you did not know about that finding it's because the report's other conclusion – that a third of grads in the humanities are overqualified – received much more attention. That conclusion, however, was derived from several questionable assumptions the study makes. Positions that often require a university degree are sometimes treated as not needing one; jobs in sales or service are not differentiated based on the sector, and the number of years that are studied is not long enough to really track how university students fare in the long run.
Let's first consider what the authors say is required to get a job as a community and social worker. The National Occupation Classification, which is the basis of the report's classifications, says that for such workers, "completion of a college or university program in social work, child and youth care, psychology or other social science or health-related discipline is usually required." Yet, the report considers all community and social positions as not requiring a university degree even though a portion of those positions actually requires one.
The authors also assume that a university degree is not necessary for non-management work in the sales and service sector. That might be true of cashiers or retail sales clerks, but in the case of someone selling sophisticated products to clients with complex needs – such as in IT, nuclear systems, or high art – a university degree is very likely required. The same is true of administrative or executive assistants: Most may not require a degree, but executive assistants for CEOs of large corporations, high level organizations or politicians are indeed likely to require a university degree given the knowledge base needed and the nature of the judgments, decision-making or language skills required for the job.
Finally, the study looks at the labour market outcomes of very early graduates – the average age of graduation is about 24 – still finding their way in the labour market. Not surprisingly, the proportion of university graduates working in job categories that typically require only a high school or college degree decreases with age. This reflects the fact that it does take some time for graduates to find jobs that fit their qualification or to receive promotions into positions that typically require a university degree. The present occupation of these very early graduates does not reflect their long-term careers outcomes. University graduates have more opportunities for advancement.
Some have argued that universities should provide an education that has a clear labour market outcome. This would include professions that have both high employment rates and the potential for high income, such as medicine, engineering, computer science and law.
That's where a second study comes in. It found that the wages of high-school graduates have increased, narrowing the gap with those of university grads. More bad news for students choosing university? Not so fast. It also revealed that the employment rate of BA holders has remained higher. For women, it has increased. That's not the case for high-school diploma holders.
Labour market outcomes are no secret. Very few people majoring in history expect to be historians. Their choice is based on their interest in history. Career paths after graduation for a history graduate might include further studies in law school or education or just about any job that requires advanced critical thinking and good writing skills. We should also not assume that students choose an education based on future income and occupation. There are many writers, artists and actors who provide a great service to the community by pursuing their interests and participating in the cultural community while also working in jobs that are not directly linked to their credentials, just to pay the bills.
For others, don't be alarmed by the headlines. As outlined in my report for the Council of Ontario Universities, University Works, a university education is still a solid path to high employment and high earnings for those who want those rewards.
Cecilia Brain is an Economist and Senior Policy Analyst at the Council of Ontario Universities.