Get more bang for your buck with post-secondary degrees
CIBC report says too many students go into low-paying majors, few choose profitable fields
Thousands of Canadian students will head back to school next week, and if a new report is accurate, many of them should reconsider their major if they want to find jobs upon graduation.
A report from CIBC World Markets released on Monday painted a bleak picture of how Canadian university graduates are faring compared to their counterparts in other, similar countries.
The report said not many students are getting the appropriate "bang for their buck" out of their degrees. Many are faced with lower incomes than graduates in similar countries.
One of the problems, according to the report’s authors, are the programs students are choosing.
"There are many fields that provide you with a significant increase in your ability to become employable and actually have this nice rate of return on education," said Benjamin Tal, the deputy chief economist at CIBC. "Math, for example, physics, engineering — even medicine is showing a really nice rate of return."
But, said Tal, a number of fields that are now extremely popular with students result in low earnings compared to the amount students invested in their degrees.
"If you look at education, social science — those kinds of fields do not give you the same rate of return," he explained.
University of Winnipeg president Lloyd Axworthy challenges that. He said the report didn’t look at enough variables — like critical thinking skills.
"I think what employers are looking for is not just the credential on the piece of paper. They’re looking for your judgment, maturity, skill, your ability to analyze, your ability to relate to people," said Axworthy.
The report showed that regardless of students’ perceived ability to problem solve, students who chose social sciences or arts as their majors did not see as good returns on their education investment as other students.
It also showed similar trends were taking place in the United States, Sweden and other industrialized countries.
It noted that though students are aware they are going into lower-earning fields, in the last 10 years, there has not been a significant increase in the number of students applying to fields that post better earnings.
The report speculated motivation played a factor in students’ decisions. The authors said the joy of learning a less technical subject could be driving the "continual increase in students of relatively low-paying fields of study."
The report also speculated the increase in female students could be "raising the ranks" of students in subject areas where women are disproportionately represented such as arts and social sciences.
Finally, the report noted while a post-secondary degree could be necessary to get a good job in Canada, it isn’t the only important factor. Especially, the authors noted, because Canada has an excess of post-secondary graduates.
In fact, among the 20 countries in the Organisation for Economic Co-operation and Development, Canada has the highest proportion of post-secondary degree or diploma holders. It also has the highest share of grads earning less than half of the average income for the country.