Study: Education and earnings

1980 to 2005

Average real earnings since 2000 have increased at a faster pace for young, less-educated male workers than for any other group, including university graduates, according to a new study.

Wages for this group (young men aged 25 to 34 with a high school education) have rebounded during the past five years as a result of an influx of these individuals into lower-skilled jobs in industries experiencing strong growth.

The study, published in the June online version of Perspectives on Labour and Income, found that this movement in wages narrowed the gap in earnings between less-educated and university-educated men. However, the gap is still wide.

According to data from the Labour Force Survey, the average weekly earnings of men aged 25 to 34 with a high school diploma increased by 5.2% between 2000 and 2005. In contrast, they fell 2.8% for men in the same age group with a university degree.

Even young men without a high school diploma benefited. Across all sectors, their average wages increased 7.8%.

The study cautioned that the growth in earnings among these less-educated workers is not expected to be sustainable. This is because their recent gains appear to be a result of short-term fluctuations in demand, mainly due to the employment boom in oil and gas, mining and construction.

Both blue-collar and white-collar jobs have become more plentiful since 2000. But the most substantial growth occurred in positions not requiring postsecondary education.

These include retail sales and clerical posts for white-collar workers and construction and mining for blue-collar. Such jobs generally employ a larger proportion of young, less-educated workers.

The oil boom led to a 43% growth in employment in the oil and gas sector between 2000 and 2004, while employment in construction rose 26%. In contrast, overall employment nationwide increased by less than 10% between 2000 and 2005.

The study found these high-growth sectors did in fact contribute to the increase in weekly earnings for employees with only high school education.

If these sectors were excluded, average weekly earnings for male workers aged 25 to 34 with a high school diploma would have increased only 3.2% instead of 5.2%.

Similarly, among those in the same age group with less than high school education, average weekly earnings would have gone up only 3.6% instead of 7.8%.

Between 2000 and 2005, full-time paid employment rates for men aged 25 to 34 with a high school diploma increased from 72.1% to 74.6%.

These were consistently lower than employment rates for university graduates. However, in the case of these graduates, employment rates edged down during this five-year period from 78.2% to 75.7%.

Definitions, data sources and methods: survey numbers, including related surveys, 3701 and 3901.

The article "Education and earnings" is now available in the June 2006 online edition of Perspectives on Labour and Income, Vol. 7, no. 6 (75-001-XIE, free) from the Our products and services page of our website.

For more information, or to enquire about the concepts, methods or data quality of this release, contact Lucy Chung (613-951-1903; lucy.chung@statcan.gc.ca), Distributive Trades Division.