Is Education Always the Best Way to Earn More Money

Date posted: Sept. 8, 2017
by:
Is Education Always the Best Way to Earn More Money

Photo by Scott Webb

For decades, higher education has been viewed as the only way to secure a steady job with good benefits and favourable hours. Parents of our generation urged their children to go to university or college after high school, and it didn’t matter which one – anything was better than nothing!

But as tuition for post-secondary education reaches astronomical levels, and students graduate with ten’s of thousands of dollars in debt, post-secondary education is no longer a no-brainer. Combine the rising costs of tuition with the perception that many graduates have a hard time finding full-time work in their field after school and it’s important to ask – is pursuing a university or college degree still the best way to earn more money? Let’s look at the facts:

Degrees Still Earn More

Data from Statistics Canada show that for every $1 earned by a male university or college graduate, his high school graduate counterpart earned $0.75. For every $1 a female university or college graduate earns, her high school graduate counterpart will earn $0.78. This wage gap has been steadily decreasing over time, but at this point, the average university graduate still earns more than the average high school graduate.

Higher Education Leads to Higher Wages Over Time

According to the Education Policy Research Initiative at the University of Ottawa, higher education does still allow new graduates to earn a higher salary no matter what they study.

The study looked at the incomes of 620,000 graduates from 14 Canadian universities and colleges. Between 2005 and 2013. In the first year of graduation (2005) the subjects that attended a university earned an average of $45,200, and that amount rose steadily every year to $74,900 in 2013.

The numbers were also good for college graduates, showing an average starting salary of $33,900 in 2005 and that salary grew to $54,000 by 2013.

The Subject Matters

While wages are higher for university and college graduations, how much higher depends on which subjects you choose. University graduates who specialized in engineering, math and computer science, or business earned $99,600, $89,300, and $81,400 after eight years of employment, respectively. In contrast, university graduates who studied the social sciences, humanities, and fine arts earned $61,900, $57,000, and $45,100 after eight years of employment, respectively.

College graduates who specialized in STEM programs (science, technology, engineering, and math) also enjoyed both a higher starting salary and bigger wage growth than their fellow graduates that studied humanities.

Is Higher Education Still the Best Way to Earn More Money?

If you are a high school graduate and you’re considering higher education to earn more money, attending college or university and studying an in-demand subject is still the best way to see huge wage gains both right after graduation and in subsequent years. But this fact does not mean that borrowing ten’s of thousands of dollars to finance your education is a smart move. The average tuition for a four-year degree program in Canada is $5,959 per year, and that doesn’t include the cost of books or room and board. Multiply that by four years, and it’s easy to see how you could end up with a $40,000 degree. You should still do everything in your power to limit the debt you take on while pursuing a degree.

You can improve your return on investment by choosing a school with lower tuition, and choose one that is close to home, so you don’t have to pay extra for room and board. Applying for scholarships and working a part-time job during your degree are also great ways to minimize the financial impact of attending university or college.

Check out more related content:

MoneyMinute - What is a TFSA?
book icon

MoneyMinute - What is a TFSA?

Published on: Sept. 20, 2017
Author:


Continue reading

Can Balance Transfer Credit Cards Help You Pay Off Debt?
book icon

Can Balance Transfer Credit Cards Help You Pay Off Debt?

Published on: Sept. 18, 2017
Author:


Continue reading

MoneyMinute - Ways to Save for School If You're Broke

MoneyMinute - Ways to Save for School If You're Broke

Published on: Sept. 6, 2017
Author:


Watch video