Relative wage patterns among the highly educated in a knowledge-based
economy?
René Morissette, Yuri Ostrovsky and Garnett Picot
Business and Labour Market Analysis Division
Analytical Studies Branch research paper series, No. 232
Context
A concern among policymakers is that greater demand for high-skilled
workers – caused by skill-biased technological changes and/or
other forces – might not be satisfied by the existing supply of
high-skilled workers and might result, at least temporarily, in fast-growing
wages among university graduates in expanding industries. If so, one
might expect the ratio of wages of university graduates to those of
high school graduates to grow faster in high-knowledge industries than
in other industries. One might also expect an acceleration of relative
wage growth among university graduates with a degree in applied fields
of study.
Objectives
The objectives of this study are twofold. First, the evolution of the
education premium and the existence of diverging university/high school
earnings ratio trends across industries in the knowledge-based economy
is investigated. Second, additional information about the changing demand
for high-skilled workers is provided by comparing relative wages of
university graduates holding degrees in "applied" fields to those of
other university graduates ("field" premium).
Findings
Even though employment grew much faster in high-knowledge industries
than in other sectors during the last two decades, trends in relative
wages and real wages of university and high-school graduates have displayed
remarkably similar patterns across industries.
There is no evidence of an acceleration of relative wage growth among
university graduates with a degree in applied fields of study.
The examination of wage patterns of highly educated workers has revealed
little evidence that would support the notion of a widespread
imbalance between the demand and supply of highly skilled workers in
Canada .
Data source: Census, 1980-2000.
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