Statistics Canada’s recent release of education data from the 2011 National Household Survey had many journalists, public policy analysts and others scrambling to interpret how the country is doing in this important area. Among the key findings: women are earning degrees in ever greater numbers, including in the STEM disciplines, while most apprenticeships are still held by men.
There was also much analysis of unemployment rates by level of education. The story is a positive one: generally, the higher your level of education, the lower your chances of being unemployed. The lock-step nature of this relationship is quite remarkable. Here is the unemployment rate for those aged 25-64 (the prime working age) by level of education:
- no certificate, diploma or degree, 11.3%
- registered apprenticeship certificate, 6.7%
- college certificate or diploma, 5.2%
- bachelor’s degree, 4.5%
- earned doctorate, 4.1%.
The only minor anomaly was for those with a master’s degree, where the unemployment rate was 5.0%, above the rate for those with a bachelor’s degree.
But, a closer analysis of the data by location of study – inside Canada vs. outside Canada – reveals something quite interesting that could play a role in the public’s perception of the value of a degree. And that is: those who earned their degrees abroad have significantly higher unemployment levels than those who earned their degrees at a Canadian institution (see graph).
To wit: just 3.7% of those with a bachelor’s degree and 3.8% of those with a master’s degree earned in Canada were unemployed in 2011, whereas unemployment levels were twice as high for graduates who earned their degrees abroad: 7.7% for bachelor’s graduates and 7.5% for master’s graduates. For PhDs, it was 3.4% for Canadian-educated vs. 5.0% for foreign-educated.
The same pattern holds true for young adults aged 24 to 34. So, for example, the total unemployment rate for undergraduate degree holders in this age range is 5.3%, but only 4.7% for those with a degree earned in Canada vs. 9.4% for those with a degree earned outside Canada.
Why is this particularly relevant for universities? Because, there are proportionally far more university graduates who have earned their certification abroad than for other levels of education. For the population aged 25 to 64:
- about 6% to 7% of those with trades or apprenticeship certificates earned them abroad
- for college diplomas, it was around 8.5%
- for bachelor’s degrees, 21%
- for master’s degrees, 34%
- and for PhDs, a whopping 42%
Going back to these unemployment rates for holders of Canadian degrees, it’s important to note that these rates are very low. Many economists would consider these rates to be close to the “natural” rate of unemployment (which includes seasonal and voluntary unemployment as people move between jobs in the short term).
The data doesn’t suggest what accounts for this discrepancy in employment rates between those individuals with Canadian-earned degrees and those who earned them abroad. The discrepancy might speak to the uneven quality of degrees earned abroad, or it could be that people with foreign degrees also have less Canadian work experience, and that Canadian employers are therefore less willing to hire them. But that’s just speculation. Either way, it’s important to remember that a degree earned within Canada confers a real advantage in the job market.