Relative earnings of British Columbia university graduates
by Andrew Heisz, Business and Labour Market Analysis Division
This article was published in Education quarterly review,
catalogue
number 81-003-XIE, vol. 9 no. 01
It is well known that there are important differences in average
earnings of graduates from different fields of study following graduation.
However, the average can mask as much information as it portrays.
The average or median earnings of graduates from a particular field
of study might not reflect the experience of most graduates if the
variation of earnings is wide.
This paper examines the annual earnings of British Columbia university
graduates 5, 10 and 15 years after their graduation. Median annual
earnings varied significantly across fields of study, with graduates
in applied fields such as engineering, commerce and medical sciences
typically earning more than graduates from other fields. However,
differences in median earnings by field of study tend to decrease
as graduates gain more experience.
While these differences in median earnings are important, examination
of other points in the distribution of earnings for graduates from
various fields of study reveals that median outcomes misrepresent
the earnings of a substantial proportion of graduates. For example,
at the 15-year milestone, the one-quarter of English grads with
the highest incomes earned more than the one-half of the lowest-earning
graduates from many other fields of study (including economics,
physical sciences and teacher training, for example), or the 25%
of engineering graduates earning the lowest incomes. And while commerce
graduates fared well on average, the lowest-earning 25% of commerce
graduates earned less than the top-earning 50% of graduates in many
other fields earned. The message is a simple but important one for
people selecting fields of study: most graduates do not earn the
average earnings associated with the field they choose, and a successful
graduate in a field associated with lower earnings may earn substantially
more than a less successful graduate in a field where earnings tend
to be higher.
Focusing on which graduates rise to the top of the earnings distribution,
this paper finds that results at the top of the distribution also
do not exactly mirror what one would expect from average outcomes.
Although engineers earn more than economics or political science
graduates at the median, at the 15-year milestone a political science
or economics graduate was more likely than an engineering graduate
to be found in the top 10% of earners. Engineers are also unlikely
to achieve the top 2% of earners, while graduates from fields with
lower average earnings, such as economics, political science and
biology, are more likely to be in the top 2%. Examining points in
the distribution other than the average or median leads to an enhanced
understanding of outcomes for graduates.
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