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    The Cumulative Earnings of Postsecondary Graduates Over 20 Years: Results by Field of Study

    The Cumulative Earnings of Postsecondary Graduates Over 20 Years: Results by Field of Study

    by Yuri Ostrovsky and Marc Frenette
    Social Analysis and Modelling Division

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    This article in the Economic Insights series reports on the cumulative earnings over a 20-year period of college and bachelor's degree graduates from different fields of study. This article is part of a program at Statistics Canada that examines various dimensions of labour market outcomes of postsecondary graduates.

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    Introduction

    When students graduate from high school, they make at least two educational decisions that affect the rest of their lives. The first is whether to pursue a higher level of education. The literature clearly demonstrates that postsecondary graduates tend to fare better in terms of labour force participation, unemployment, and earnings than do people with less education.

    Students who choose to enter a postsecondary program must make a second decision: what to study. Canadian evidence on labour market outcomes by field of study is limited. Research has generally been based on cross-sectional informationNote 1 or on longitudinal data with limited scope;Note 2 until recently, national-level data have not been available to observe and quantify long-term cumulative outcomes associated with education. However, with the development of new, national longitudinal administrative data, this is now possible. A recent study, in fact, found considerable differences in cumulative earnings across levels of educational attainment.Note 3

    This study extends that research by examining the cumulative employment earnings of graduates of different fields of study over a 20-year period. Employment earnings include paid wages and salaries, as well as net proceeds from self-employment. The analysis is based on a sample of 15,166 college and bachelor’s degree graduates who were aged 26 to 35 in 1991. Information about their level of education and field of study was obtained from their responses to the 1991 Census long questionnaire; information about their employment earnings over the subsequent 20 years was taken from their T1 Income Tax Returns.Note 4 This study documents three aspects of earnings by field of study: (i) differences in median cumulative earnings across fields of study; (ii) the distribution of cumulative earnings within fields of study; and (iii) the trajectories of annual median earnings within fields of study over the life course of graduates.

    Cumulative earnings vary by level and field of study

    Bachelor’s degree and college graduates earned considerably more than did high school graduates. From 1991 to 2010, the median cumulative earnings (expressed in 2010 constant dollars) of male high school graduates amounted to $882,300 (Table 1). In comparison, male college graduates earned about 1.3 times more ($1,137,000), and male bachelor’s degree graduates earned about 1.7 times more ($1,517,200).

    Table 1
    Median cumulative earnings by sex, level of education, and field of study
    Table summary
    This table displays the results of Median cumulative earnings by sex Men, Women, Bachelor's degree, College certificate and High school diploma, calculated using 2010 constant dollars units of measure (appearing as column headers).
      Men Women
    Bachelor's degree College certificate High school diploma Bachelor's degree College certificate High school diploma
    2010 constant dollars
    Education 1,290,400 996,600 Note ...: not applicable 1,044,600 513,500 Note ...: not applicable
    Fine and Applied Arts 843,900 807,200 Note ...: not applicable 652,100 437,300 Note ...: not applicable
    Humanities 1,144,600 827,500 Note ...: not applicable 808,200 555,900 Note ...: not applicable
    Social Sciences 1,358,900 1,241,500 Note ...: not applicable 824,300 563,800 Note ...: not applicable
    Business Administration 1,619,400 1,099,500 Note ...: not applicable 1,169,100 625,100 Note ...: not applicable
    Life Sciences 1,334,700 753,500 Note ...: not applicable 844,900 502,300 Note ...: not applicable
    Engineering 1,845,000 1,244,200 Note ...: not applicable 972,600 718,800 Note ...: not applicable
    Health 1,627,600 1,089,700 Note ...: not applicable 1,094,000 812,800 Note ...: not applicable
    Mathematics and Physical Sciences 1,607,500 1,128,000 Note ...: not applicable 1,148,700 793,800 Note ...: not applicable
    All fields of study 1,517,200 1,137,000 882,300 972,500 643,200 458,900

    Although women generally earned less than men did, the patterns were similar. Women with a bachelor’s degree earned $972,500 (about 2.1 times more than high school graduates), and those with a college certificate earned $643,200 (about 1.4 times more than high school graduates).

    Postsecondary graduates’ earnings also varied considerably across fields of study. For example, men with a bachelor’s degree in Engineering earned $1,845,000 over the period, more than twice as much as Fine and Applied Arts graduates, who earned $843,900. Men with a bachelor’s degree in Business Administration, Health, and Mathematics and Physical Sciences were also top earners; those who graduated with a degree in Humanities ranked relatively low (second behind Fine and Applied Arts graduates).

    The findings were generally similar for women with a bachelor’s degree. Top earners again included those who graduated from Business Administration, Mathematics and Physical Sciences, Health, and Engineering. A notable difference between men and women was the relative ranking of Education graduates. Among men, they ranked seventh out of the nine fields. Among women, they ranked fourth—just behind Health graduates and slightly ahead of Engineering graduates. As was the case with male bachelor’s degree graduates, the lowest earners among women with a bachelor’s degree were those who had studied Fine and Applied Arts.

    Male and female college graduates of Fine and Applied Arts programs also ranked near the bottom based on median cumulative earnings (second lowest among men; lowest among women).

    For men and women with a college certificate, top earners included graduates of Engineering, Health, Mathematics and Physical Sciences, and Business Administration (as was the case for bachelor’s degree graduates). Interestingly, male college Social Sciences graduates ranked second in median cumulative earnings (just behind Engineering graduates). In contrast, the median cumulative earnings of men with a bachelor’s degree in Social Sciences were well below the median for all fields of study.

    Cumulative earnings also vary substantially within each field

    Even if students select the same field of study, their long-term earnings can be quite different. This may be the result of factors such as hours of work, occupation, industry, access to employment networks, abilities and random luck—information not available in the administrative data used in this analysis. Nonetheless, quantifying variability within fields provides perspective on long-term earnings prospects.

    To do this, men and women with a college certificate or a bachelor's degree in each field were ranked from lowest to highest in terms of their cumulative earnings. Their “normalized” cumulative earnings are shown in Tables 2 and 3 at the 10th percentile (P10), 25th percentile (P25), median or 50th percentile (P50), 75th percentile (P75), and 90th percentile (P90). Normalized values are expressed relative to the median for all fields combined. The ratios of cumulative earnings of individuals at the 75th and 25th percentiles (the P75/P25 ratio) and at the 90th and 10th percentiles (the P90/P10 ratio) were used as measures of earnings variation within disciplines.

    Table 2
    Normalized cumulative earnings at selected percentiles (P) by sex and field of study, bachelor's degree graduates
    Table summary
    This table displays the results of Normalized cumulative earnings at selected percentiles (P) by sex and field of study P10, P25, P50, P75, P90, P75/P25 and P90/P10, calculated using normalized value and ratio units of measure (appearing as column headers).
      P10 P25 P50 P75 P90 P75/P25 P90/P10
    normalized valueNote 1 ratio
    Men  
    Education 0.41 0.63 0.85 1.00 1.12 1.58 2.75
    Fine and Applied Arts 0.15 0.24 0.56 0.89 1.09 3.77 7.54
    Humanities 0.21 0.40 0.75 1.06 1.53 2.62 7.46
    Social Sciences 0.41 0.65 0.90 1.21 2.15 1.86 5.21
    Business Administration 0.53 0.77 1.07 1.63 2.68 2.10 5.07
    Life Sciences 0.46 0.62 0.88 1.10 1.43 1.77 3.14
    Engineering 0.64 0.93 1.22 1.57 2.20 1.68 3.44
    Health 0.67 0.86 1.07 1.40 1.96 1.63 2.93
    Mathematics and Physical Sciences 0.52 0.80 1.06 1.46 2.61 1.82 5.02
    All fields of study 0.45 0.71 1.00 1.37 2.19 1.94 4.89
    Women  
    Education 0.33 0.66 1.07 1.35 1.58 2.06 4.75
    Fine and Applied Arts 0.08 0.30 0.67 1.05 1.33 3.51 16.17
    Humanities 0.18 0.47 0.83 1.31 1.62 2.76 9.20
    Social Sciences 0.25 0.49 0.85 1.24 1.59 2.54 6.32
    Business Administration 0.36 0.77 1.20 1.69 2.29 2.21 6.28
    Life Sciences 0.12 0.47 0.87 1.22 1.49 2.61 12.60
    Engineering 0.30 0.56 1.00 1.58 1.81 2.81 6.13
    Health 0.46 0.80 1.13 1.36 1.67 1.71 3.65
    Mathematics and Physical Sciences 0.29 0.70 1.18 1.53 2.01 2.19 6.85
    All fields of study 0.29 0.58 1.00 1.36 1.69 2.34 5.87
    Table 3
    Normalized cumulative earnings at selected percentiles (P) by sex and field of study, college graduates
    Table summary
    This table displays the results of Normalized cumulative earnings at selected percentiles (P) by sex and field of study P10, P25, P50, P75, P90, P75/P25 and P90/P10, calculated using normalized value and ratio units of measure (appearing as column headers).
      P10 P25 P50 P75 P90 P75/P25 P90/P10
    normalized valueNote 1 ratio
    Men  
    Education 0.41 0.62 0.88 1.09 1.49 1.75 3.67
    Fine and Applied Arts 0.28 0.47 0.71 1.11 1.44 2.36 5.16
    Humanities 0.24 0.43 0.73 0.99 1.28 2.30 5.44
    Social Sciences 0.49 0.81 1.09 1.42 1.59 1.76 3.25
    Business Administration 0.39 0.67 0.97 1.35 1.81 2.01 4.69
    Life Sciences 0.25 0.44 0.66 0.87 1.11 1.99 4.41
    Engineering 0.44 0.76 1.09 1.43 1.80 1.89 4.09
    Health 0.34 0.72 0.96 1.20 1.45 1.68 4.26
    Mathematics and Physical Sciences 0.35 0.64 0.99 1.37 2.13 2.15 6.09
    All fields of study 0.38 0.68 1.00 1.36 1.71 2.00 4.46
    Women  
    Education 0.14 0.43 0.80 1.26 1.66 2.94 11.68
    Fine and Applied Arts 0.10 0.31 0.68 1.11 1.51 3.54 14.97
    Humanities 0.15 0.45 0.86 1.30 1.88 2.92 12.56
    Social Sciences 0.17 0.46 0.88 1.37 1.79 2.97 10.70
    Business Administration 0.20 0.52 0.97 1.37 1.80 2.63 9.13
    Life Sciences 0.12 0.42 0.78 1.16 1.52 2.80 12.81
    Engineering 0.27 0.53 1.12 1.69 2.42 3.17 8.98
    Health 0.35 0.79 1.26 1.73 2.11 2.19 6.04
    Mathematics and Physical Sciences 0.34 0.74 1.23 1.68 2.46 2.25 7.19
    All fields of study 0.21 0.53 1.00 1.46 1.93 2.77 9.43

    There was considerable earnings variation in cumulative earnings in every discipline, as evidenced by the P75/P25 and the P90/P10 ratios. The P75/P25 ratio ranged from about 1.6 (registered by men with a bachelor’s degree in Education) to about 3.8 (men with a bachelor’s degree in Fine and Applied Arts). The P90/P10 ratio ranged from about 2.7 (men with a bachelor’s degree in Education) to about 16.2 (women with a bachelor’s degree in Fine and Applied Arts).

    In general, the variation in cumulative earnings within fields of study was higher among women. This was largely attributable to lower earnings at the bottom of the distribution, both in an absolute and a relative sense.

    An alternative way to visualize the variability in cumulative earnings within and across fields of study is through a three-dimensional chart. For instance, Figure 1 pertains to men with a bachelor’s degree. The fields are sorted from left to right in descending order of cumulative earnings at the 90th percentile.

    Description for figure 1

    The “very high” earners (those whose cumulative earnings amounted to at least $2,500,000 over the 20-year period—an annual average of at least $125,000) are at the top (90th percentile) of the distributions in five fields: Business Administration, Mathematics and Physical Sciences, Engineering, Social Sciences, and Health. The cumulative earnings of men at the 90th percentile of the distribution of Business Administration graduates amounted to slightly more than $4,000,000 over the period. This means that about 10% of male graduates with a bachelor’s degree in Business and Administration had average annual earnings of $200,000 or more during the two decades.

    Some graduates in other fields who were above the 90th percentile in their respective discipline may also have been “very high” earners (cumulative earnings of more than $2,500,000). However, the earnings of graduates of these disciplines (even those at the 90th percentile) were comparatively low. For example, the cumulative earnings of men with a bachelor’s degree in Education and Fine and Applied Arts who were at the 90th percentile amounted to about $1,700,000 over the 20-year period.

    At the opposite end of the spectrum, men at the 10th percentile of the earnings distribution of Fine and Applied Arts graduates earned $222,300 (an annual average of $11,015). Men at the 10th percentile of Humanities graduates earned $311,700 ($15,585 per year).Note 5

    Similar findings are evident for women with a bachelor’s degree (Figure 2). Although the ordering of disciplines at the 90th percentile is slightly different, the highest earners were once again from Business and Administration, Mathematics and Physical Sciences, Engineering, and Health. The lowest earners at the 10th percentile were from Fine and Applied Arts and Life Sciences graduates.

    Description for figure 2

    Absolute change in median annual earnings similar in most fields

    Graduates of the various disciplines likely bring unique skills to the labour market, which may be valued or rewarded differently over time. For example, technical skills may yield greater returns early in one's working life when an individual is at the forefront of the most recent technology; interpersonal skills may yield greater returns at later stages when individuals move into supervisory or managerial positions. Although such factors could have implications for the earnings trajectories of graduates of different fields of study, this is not the case when median annual earnings are tracked through the study period.

    Real median annual earnings at the beginning (1991) and end (2010) of the study period are shown in Table 4. Also shown is the change between these two years.

    Within each sex and education category, most fields experienced similar absolute changes in median annual earnings over the period. Among men with a bachelor’s degree, the absolute change in median annual earnings ranged from $25,000 to $31,000 in six out of the nine fields of study. Similarly, among women with a bachelor’s degree, the absolute change in median annual earnings ranged from $20,000 to $28,000 in six out of the nine fields of study. Among college graduates, the absolute changes in median annual earnings were even more consistent across disciplines. Note that the relative changes in median annual earnings (not shown in the table) tended to vary more across fields given the large variation in median annual earnings at the beginning of the period.

    Table 4
    Median annual earnings by sex, field of study, 1991 and 2010
    Table summary
    This table displays the results of Median annual earnings by sex Bachelor's degree graduates, College graduates, 1991, 2010 and Change, calculated using 2010 constant dollars units of measure (appearing as column headers).
      Bachelor's degree graduates College graduates
    1991 2010 Change 1991 2010 Change
    2010 constant dollars
    Men  
    Education 51,100 78,100 27,000 39,600 55,200 15,600
    Fine and Applied Arts 22,900 42,000 19,100 34,800 42,500 7,700
    Humanities 40,800 71,300 30,500 35,700 45,400 9,700
    Social Sciences 52,300 78,200 25,900 56,600 72,400 15,800
    Business Administration 57,800 95,200 37,400 45,100 60,900 15,800
    Life Sciences 51,800 77,800 26,000 29,900 44,800 14,900
    Engineering 66,400 105,300 38,900 51,100 70,300 19,200
    Health 67,400 92,400 25,000 50,400 61,500 11,100
    Mathematics and Physical Sciences 61,900 90,000 28,100 50,900 65,000 14,100
    All fields of study 57,400 87,800 30,400 47,600 63,900 16,300
    Women  
    Education 39,200 69,600 30,400 22,500 31,800 9,300
    Fine and Applied Arts 21,300 34,200 12,900 13,400 26,600 13,200
    Humanities 31,500 51,800 20,300 23,200 35,600 12,400
    Social Sciences 32,600 54,300 21,700 20,700 35,500 14,800
    Business Administration 45,500 73,200 27,700 25,700 39,100 13,400
    Life Sciences 33,700 58,900 25,200 21,200 29,500 8,300
    Engineering 53,900 56,400 2,500 29,800 43,900 14,100
    Health 46,800 70,500 23,700 32,700 50,600 17,900
    Mathematics and Physical Sciences 46,900 67,100 20,200 36,000 46,800 10,800
    All fields of study 38,500 64,100 25,600 26,400 39,600 13,200

    Conclusion

    A number of key findings emerge from this analysis of the 20-year cumulative earnings of postsecondary graduates by field of study. The first is the considerable variability in median cumulative earnings by level and field of study. Second, even within each field, graduates’ earnings varied substantially. Third, the change in median annual earnings was similar for graduates of most fields over the 20-year period.

    References

    Finnie, R. and M. Frenette. 2003. “Earnings Differences by Major Field of Study: Evidence from Three Cohorts of Recent Canadian Graduates.” Economics of Education Review 22 (2): 179–192.

    Frenette, M. 2014. An Investment of a Lifetime? The Long-term Labour Market Premiums Associated with a Post-secondary Education. Analytical Studies Branch Research Paper Series, no. 359. Statistics Canada Catalogue no. 11F0019M. Ottawa: Statistics Canada.

    Heisz, A. 2003. Cohort Effects in Annual Earnings by Field of Study Among British Columbia University Graduates. Analytical Studies Branch Research Paper Series, no. 200. Statistics Canada Catalogue no. 11F0019M. Ottawa: Statistics Canada.

    Notes

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