Canadian university graduates went back to school in large numbers after the recession of 2008-2009, with almost half the class of 2010 taking further courses after their BA, a new study released by Statistics Canada on Friday has found.
Over the past decade, students have increasingly pursued more education after their bachelor's degree, but the new figures show a jump in the number who found the classroom a better choice than the labour market.
The study is Statistics Canada's first analysis of how the last economic downturn affected the labour market outcomes and decisions of youth. Unemployment reached its peak in the summer of 2009 – almost a year after the financial services firm Lehman Brothers filed for bankruptcy and set off a long economic unravelling – and would not dip below 8 per cent until the next year.
Students who graduated at that time were taken aback by how difficult it was to get their careers started.
"When I started off, finance was a great field to be in, they were hiring right, left and centre, but by the time I graduated, everything dried up," said Harivan Jaffer, who graduated with a BA in commerce and a major in finance from the University of Ottawa in the fall of 2009.
After facing tens of competitors for every position, Mr. Jaffer found a contract job the next fall. He is now doing an MBA at York University's Schulich School of Business. "If I didn't have to do it, I would not have done it, but it's a good school."
While many students may have chosen to keep studying because they were discouraged about the jobs open to them, the decision pays off. Students with master's degrees earned almost $20,000 more three years after graduation compared to BA holders and were more satisfied with the quality of the work.
"Master's and PhD graduates are more likely to say that their jobs are aligned with their education," said StatsCan analyst Sarah Jane Ferguson, one of the authors of the study.
More education came with higher debt. Experts say the higher earnings will lead students to pay the loans back faster.
"Are we moving toward a generation of over-educated Canadians? Most experts say probably not. People are responding to the market signals and the job opportunities out there," said Ross Finnie, the director of the Education Policy Research Initiative at the University of Ottawa.
The study shows that some university programs were better able to protect students from the tough labour market. Students enrolled in a co-op program reported higher earnings, a better job match between their education and job and more full-time work after leaving school.
A report from TD Economics in 2012 on the effects of previous recessions on youth found that it can take as long as 15 years to erase the impact of graduating in a downturn.
Friday's study is based on the National Graduates Survey, which has looked at people's earnings, unemployment rates and job satisfaction two years post-graduation for the past three decades. The current survey polled students three years after graduation, and researchers caution that as a result, the labour market experiences of 2010 graduates are difficult to compare with those of earlier generations.
"It just stresses the importance of supporting a data set in a way that they can be planned for and carried out to the usual standards that Statistics Canada stands by," Dr. Finnie said.