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Canada’s troubling downward trend in work-force skills

Parisa Mahboubi, PhD, is a senior policy analyst at the C.D. Howe Institute.

Canada faces a troubling trend in the skills levels of its work force. Despite more Canadians obtaining a postsecondary education between 2003 and 2012, literacy and numeracy skills have slid. What gives?

According to OECD international surveys of adult skills in seven participating countries, including the Netherlands, New Zealand, Australia, Norway, Italy and the United States, the problem with declining numeracy scores is widespread. But Canada and Norway were the only countries with a drop in literacy skills. For Canada, this is a paradox: We have the largest share of the working-age population with tertiary education among these Organization for Economic Co-operation and Development countries.

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Earning a postsecondary education is gaining more importance, given the increasing demand for skills in the labour market. Higher-education levels should lead to higher proficiency in literacy and numeracy skills and consequently greater employment and earnings potential for workers.

My latest research for the C.D. Howe Institute – Talkin' 'bout My Generation: More Educated, But Less Skilled Canadians – identifies why Canada's working-age population has experienced a troubling slide in skills, despite the expansion of higher education.

First, skills erode with age at an accelerated rate, intensifying the negative impact of an aging population on average performance. Skills depreciation starts as soon as people leave school, likely owing to a lack of investment in continuing learning or not applying existing skills frequently enough.

The decline in skills also depends on factors other than age. My research shows that recent generations obtained lower literacy scores, regardless of their educational achievement. While age-related skill declines are common within OECD countries, a number of them, such as the Netherlands or Italy, do not experience lower literacy skills in successive generations.

Of all possible factors, such as work environment and socioeconomic characteristics, that may affect skills results across generations, education is a crucial element in the skills development of a work force. More education, however, does not necessarily guarantee more skills. Education quality also matters.

One potential explanation for Canada's lower skills level of equally educated individuals over time is differing education quality. Although skills declined for all education levels from 2003 to 2012, including the university-educated, the drop was substantially larger among those with a college degree.

Lower skill levels among those with higher educational attainment may reflect a tradeoff between expanded postsecondary access and admitting more academically weak students. Therefore, those with a high-school education or less are becoming increasingly more academically marginal as more high-school graduates go on to postsecondary institutions than in the past.

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Over past decades, postsecondary institutions have seen a spike in enrolment and graduation among Canadian students. University and college enrolments combined have increased by more than 50 per cent from 1992 to 2014. More students are enrolling and even more are graduating. The number of postsecondary graduates has increased by more than three times during the period.

The future work force must acquire the highest possible literacy and numeracy skills at each level of education. Therefore, provinces should focus their attention on education quality at all levels – from early childhood through to postsecondary. Postsecondary institutes also need to review their admission and graduation requirements to ensure they meet standards ensuring minimum literacy and numeracy skills in demand in the workplace.

To tackle age-related declines in literacy and numeracy skills, federal and provincial governments should encourage active learning and offer more targeted training opportunities for individuals who are at most risk for skills deterioration.

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