Wage gap widens, study finds
Study finds male university grads making more than females with same degree
Eight years after graduating with university bachelor degrees in 2005, males were earning $27,300 more on average than females who graduated at the same time with the same degrees, says a comprehensive new study.
Among college graduates, the wage gender gap was almost as large — $23,600 — and even larger in percentage terms, according to the analysis done by the Education Policy Research Initiative (EPRI), a national research organization based at the University of Ottawa.
The study also debunked a common myth that some university programs have scant real-world value and prepare graduates for little more than low-paid jobs as baristas.
EPRI’s researchers linked student records for more than 620,000 graduates of the University of Ottawa and 13 other universities and colleges to income tax data between 2005 and 2013 to track their earnings.
The study found that men who graduated from university in 2005 earned $2,800 more than women in their first year after graduation. By year eight, the earnings gap had widened to $27,300, meaning male graduates were earning 44 per cent more on average than female graduates.
The pattern held in all fields of study, though the gap was highest for graduates in business, engineering, social sciences and science & agriculture. It was smallest for humanities and fine arts graduates.
Women who graduated from health and humanities programs initially earned more than their male counterparts, but fell behind over time.
Among 2005 college diploma graduates, the gender wage gap was $5,500 in the first year. By year eight, men were earning 56 per cent more than female graduates, a gap of $23,600.
Further analysis could shed light on at least some of the complex reasons for the wage gap, said University of Ottawa professor Ross Finnie, EPRI’s director.
One might be that men and women are focusing on different things within the same broad area of study, and the areas that women choose don’t have as much earnings growth over time, Finnie said.
Another could be the life choices that men and women make, he said. For example, women are more likely to drop out of the workforce temporarily to have children, then work part-time afterward. “They lose labour market experience and sometimes the labour market punishes people because of that.”
And to some degree, “pure labour market discrimination” is likely part of the explanation as well, Finnie said. “It’s a combination of all those things.”
Here are some other key findings of the EPRI study, done in partnership with Statistics Canada:
Earnings growth
Overall, 2005 bachelor’s degree graduates had average annual earnings of $45,200 (in 2014 dollars) in the first year after graduation, growing to $74,900 eight years out.
College diploma graduates who finished their studies in 2005 had mean annual earnings of $33,900 in year one, growing to $54,000 eight years later.
Where the money is
Engineering, mathematics, computer science and business graduates had higher earnings and greater earnings growth than others.
For example, 2005 engineering graduates earned an average of $56,400 in the first year, rising to nearly $100,000 by year eight.
But graduates of almost all other fields of study — including humanities and social sciences — also performed well, the study found.
Humanities graduates, for instance, earned $32,800 the first year after graduation and were making $57,000 on average eight years out.
Fine arts grads had the worst results, starting out at $28,000 in 2005 and rising to just $45,100 by year eight.
The barista myth
Based on a 35-hour work week and an hourly wage of $12, a typical barista probably earns a bit more than $22,000 a year, the study suggests.
With the possible exception of fine arts graduates, mean earnings of all university graduates are “well above the barista benchmark,” even in the first year following graduation, it says. Eight years out, even fine arts grads were earning nearly twice as much on average as baristas.
“If there were one bottom line coming out of this,” Finnie said, “it’s that this barista myth, by and large, is not true.”
Which institution is best?
The study looked at graduates from seven universities, six colleges and one college transitioning to university status. Among university graduates, it found “substantial differences” in the earnings of graduates across institutions in some fields of study, particularly business, engineering and health. The same was true in almost all fields of study for college graduates. But the study doesn’t elaborate on those differences, or even list the participating institutions.
You can read the full study at www.epri.ca/tax-linkage.