Human Resources and Skills Development Canada
Symbol of the Government of Canada

Human Resources and Skills Development Canada

www.hrsdc.gc.ca

Education and Early Labour Market Outcomes in Canada - December 2007

Abstract

Using data from the Youth in Transition Survey (YITS), this paper provides a detailed analysis of the effect of educational attainment on earnings and employment probabilities. Education is treated as a discrete outcome and the heterogeneity of post-secondary education has been dealt with by distinguishing between graduates from short programs (vocational program, apprenticeship program, College/CEGEP) and long programs (Bachelor's degree, graduate-level diploma/degree). The findings show that wages are higher for high school graduates than for high school drop-outs. Further, graduates from short post-secondary programs generally have higher wages than those with high school only while graduates from long post-secondary programs earn higher wages than graduates from short programs. However, the last effect was limited to the female sample. Overall, the effect of education on wages is larger for women than for men. Findings also suggest that post-secondary education graduates are significantly less likely to be unemployed and the effect is larger for longer programs. Among those who experience an unemployment spell, the duration is shorter for those with more education. Higher educated respondents move faster from school to work. The results also indicate that education reduces the inactivity (not being employed nor searching for a job) in the labour market and more so for women than for men. Lastly, the correspondence between main field of study and occupation among post-secondary graduates is lower for graduates from long programs but increase with time since graduation. The wage effect of such correspondence is around 18% and statistically significant.

Footer

Date Modified:
2008-01-24