National Graduates Survey: A profile of young Canadian graduates

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Excerpts from The Daily. Monday, February 24, 2003

2000

College diplomas and bachelor's degrees consistently proved their value to young Canadians who entered the labour market throughout the 1990s, according to a new study.

Even though young college and bachelor graduates in the class of 1995 owed more at graduation than the 1990 graduates, they were paying those loans off at a faster rate than the class of 1990.

The study uses data from the National Survey of Graduates to examine labour market outcomes for young college and bachelor graduates in the classes of 1986, 1990 and 1995 who entered their programs directly from high school.

Young college and bachelor graduates continued to do well when it came to getting not just a job, but a good job. Generally, university graduates got better paying jobs. Both college and bachelor graduates from engineering and related fields of study consistently landed higher paying jobs.

Unemployment rates for youth
	1988	1991	1992	1995	1997	2000
High school graduates (20 to 24 years old)	..	...	15.8	...	13.2	...
High school graduates (25 to 29 years old)	...	12.8	...	12.4	...	7.4
Young community college graduates	7.2	7.3	9.1	6.4	6.9	3.3
Young bachelor graduates	11.1	6.7	10.9	5.7	8.1	5.4
..	Figures not available.
...	Figures not appropriate or not applicable.
Note:	Data for college and bachelor graduates are from the National Graduates Survey (NGS) and refer to graduates who were under 25 at time of graduation and who had entered their programs directly from high school. Data for youth with only high school are from the Labour Force Survey and approximate the age group of the cohort at the time of the NGS.

Two years after graduation, college graduates had higher employment rates than bachelor graduates. For the classes of 1986 and 1990, bachelor graduates caught up after five years. This was not the case for the class of 1995; the difference in employment rates diminished by 2000, but young college graduates were still more likely to have a job. The longer transition to employment for bachelor graduates was partly explained by the fact that some bachelor graduates continued with further education.

Note to readers This new report, Finding their way: A profile of young Canadian graduates, examines the labour market outcomes of young college and bachelor graduates who had entered their program directly from high school. It uses data from the National Graduates Survey to compare outcomes for young graduates from 1986, 1990 and 1995. More specifically, this new report focusses on bachelor and community college graduates who were aged 24 or under at graduation; who had high school or the equivalent as their highest level of educational attainment when they entered college or university; who had not obtained any further degrees or diplomas; and who were living in Canada and attending school 12 months prior to university or community college enrolment. The National Graduates Survey interviews postsecondary graduates two years and five years after graduation. The survey's sample is large (29,000 for five years after graduation for the Class of 1995, representing 294,000 graduates) and representative of graduates from different fields of study.

Bachelor graduates' unemployment rates were somewhat less sensitive than those of college graduates to shifts in labour market conditions. Their unemployment rates remained relatively low during the 1991 recession, an indication that a higher level of education tends to help insulate individuals from the effects of economic downturns.

Recent graduates paying back larger loans

Even though young college and bachelor graduates in the class of 1995 owed more at graduation than the 1990 graduates, they were paying those loans off at a faster rate than the class of 1990.

Given the lengthier program requirements and higher tuition fees at universities, the levels of student debt were 42% higher for the 1995 bachelor graduates than for the college graduates.

College graduates in the class of 1995 owed on average $8,300 in government loans, up 57% from the $5,300 owed by graduates in the class of 1990. Bachelor graduates, on the other hand, owed $11,800, which was 34% more than the $8,800 owed by 1990 graduates.

Young college and bachelor graduates of the class of 1995 had both paid off just over a quarter of the loan by two years after graduation, which was considerably less than for 1990 graduates (40% of loans repaid for college, and 34% for bachelor). Five years after graduation, however, both had paid back 55% of their original loan, almost as much as the class of 1990.

Graduates' ability to repay student loans is affected by a variety of factors such as interest rates, labour market conditions and the amount of any other debts they hold.

The survey asked graduates, at two and five years after graduation, if they had any difficulty in paying back their loans. Although the overwhelming majority of young graduates did not report any difficulties, the 1995 graduates were more likely to indicate difficulties than the young graduates of the class of 1990.

Average amounts owed to federal and provincial loan programs, young graduates
	1990 graduates	1995 graduates
	2000 constant $
College
At graduation	5,300	8,300
2 years later	3,200	5,900
5 years later	2,100	3,800
Bachelor
At graduation	8,800	11,800
2 years later	5,800	8,500
5 years later	3,800	5,400

Of the 1990 college graduates, 8% reported difficulties two years after graduation; this increased slightly to 11% five years after graduation. College graduates from the class of 1995 were more likely than the class of 1990 to report difficulties in repaying their loans both two and five years after graduation: 13% had experienced problems by two years after graduating, as did 16% in 2000.

Among 1990 bachelor graduates, 15% reported difficulty two years after graduation, as did 13% five years out. In the case of 1995 bachelor graduates, 20% had experienced problems by two years after graduation, but this dropped to 16% after five years.

Graduates in engineering and related fields consistently earned more

The best paying disciplines for bachelor graduates in the class of 1995 were engineering and applied sciences, which had median earnings of $56,000 in 2000, and mathematics and physical sciences, which had median earnings of $54,000. (Median is the point at which one-half of graduates are above and one-half are below.)

Engineering and related fields of study consistently paid the best for both college and bachelor graduates. Median earnings in 2000 for college graduates in engineering and applied sciences in the class of 1995 were $40,000, which was the same as for bachelor graduates overall.

Young college graduates move more quickly into the labour market

Two years after graduation, young college graduates were more likely to have a job than bachelor graduates. For the classes of 1986 and 1990, bachelor graduates caught up after five years. This was not the case for the class of 1995; the difference in employment rates diminished by 2000, but young college graduates were still more likely to have a job.

The longer transition to employment for bachelor graduates was partly due to the fact that some bachelor graduates continued with further education and were not yet established in the labour market.

Bachelor graduates also had a higher unemployment rate two years after graduation than college graduates. Five years after graduation, however, the rate for bachelor graduates of the classes of 1986 and 1990 had dropped below that of college graduates.

For the class of 1995, college graduates still had the lower unemployment rates in 2000.

Young bachelor graduates better insulated against downturns

Despite major differences in the economic climate faced by the graduates in this study, at least 85% of the college and 80% of the young bachelor graduates from all three classes were working two years after graduation.

Five years out, 94% of the 1995 college graduates had jobs, compared with 90% of bachelor graduates.

Unemployment rates for bachelor graduates were somewhat less sensitive than those of college graduates to shifts in labour market conditions. The pattern of unemployment during favourable and unfavourable labour market climates for community college graduates was similar to that of all youth aged 20 to 24 and 25 to 29, whereas for bachelor graduates, labour market prospects seemed less affected by changes in overall labour market conditions.

Although more study is required, there is evidence that higher levels of education may help insulate individuals from the impact of economic downturns. In fact, for the class of 1986, although college graduates faced higher unemployment rates going into the recession, unemployment rates for bachelor graduates actually fell.

The report Finding their way: A profile of young Canadian graduates (81-595-MIE, no. 3, free) is now available on Statistics Canada's website (http://www.statcan.gc.ca/). From the Our products and services page, under Browse our Internet publications, choose Free, then Education.

Additional information collected from graduates previously surveyed in the Survey of 1995 Graduates who moved to the United States will be available later in 2003.