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Education Extensive Statscan study finds successful women earn millions less than men

Men far outearn university-educated women.

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A Statistics Canada study has found that university graduates far out-earn students who graduate only from high school or those with a college diploma. Over 20 years, men with a bachelor of arts degree earn an average of $732,000 more than high-school graduates. For women, the gap is only $448,000.

The study, titled The Investment of a Lifetime?, is the first to track the employment outcomes of the same cohort of graduates over 20 years. More than 8,000 individuals were followed from 1991 to 2010, from their mid-30s to their mid-50s.

It suggests that a university degree is one of the best investments available. For college graduates, the average earnings premium versus high school was $248,000 for men and $179,000 for women.

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Not all university graduates experience those returns, however. The highest-earning graduates experience outsize premiums. Men in the top 5 per cent of earners make about $2.5-million more than their high-school counterparts, while people with BAs at the bottom of the salary scale earned only $89,000 more over two decades. And women who make it into the top 5 per cent of female earners received only $600,000 more than a high-school graduate at the same salary level.

Why do women not receive the same salary bumps as men from pursuing higher education? Contrary to popular perception, women were not more likely to drop out of the labour force for an extended period of time. Men and women spent similar amounts of time working during the two decades of the study, especially if they had attended university.

Instead, the study places the blame on many more women choosing to work in the public sector in areas such as education, health and public administration. Graduates who reach the top of their careers in the private sector earn outsized returns, particularly for men, whose salary premiums are more than double those of women. In the public sector, successful women actually out earn men but have much lower incomes.

University, college and high-school graduates do not start out with such large gaps in their starting salaries. At the age of 35, men earn on average $64,000, while college and high-school graduates are looking at $10,000 and $20,000 less respectively. By the time they reach 55, men have double the salaries of high-school graduates on average ($95,000 to $47,000) while those with a college diploma are earning $62,000.

Higher salaries are not the only benefit of continuing education beyond high school. The quality of jobs also increases. University and college grads are more likely to work in companies that offer pension plans and to have experienced fewer layoffs. Some of these differences are small, however, with university graduates being covered by a company pension plan for only a year longer than a high-school graduate.

While the survey echoes a study from the Council of Ontario Universities out this week that also found that earnings for university grads outpace that of other groups, it also sounds a note of caution. Adjusting for cognitive scores on tests that measure literacy, numeracy and problem-solving shrunk the salary gaps between groups by one-third.

Law school graduates were not included in the study.

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