Wage gap between high school grads and degree-holders narrows, but it still pays to go to university

A new Statistics Canada study suggests that while a bachelor's degree might not be the ticket to easy street it once was, your chances of being employed improve if you have that degree.

The study by StatsCan's social analysis division, published Monday, looked at wages and employment rates for two periods in the last decade, 2000-02 and 2010-12, comparing people aged 20-34 working full-time jobs.

It found that while average weekly wages fell slightly for men with bachelor's degrees in that decade, they rose about five per cent for women degree-holders.

But when it came to those with only a high-school diploma, wages rose by nine per cent for men and 11 per cent for women in the same period, showing the wage gap has narrowed.

Yet things change when it comes to working full-time. Young men with bachelor's degrees had employment rates that exceeded their high school-grad counterparts by 7.2 percentage points in the 2010-12 period, compared with 4.3 percentage points in 2000-02.

The gap for women was even wider – 18.6 versus 13.8 a decade earlier.

[ Related: Canada’s gender pay gap: Who is to blame? ]

The study considered a number of variable factors, including the effects of booms in the Western Canada's energy sector and the construction industry nationally, and the crashing of Canada's telecom and computer industries, as well as the rise in the value of the Canadian dollar.

It found, for instance, that the differences in weekly wages between young male bachelor's degree holders and high school grads fell by at least 15 percentage points in Alberta and Saskatchewan, where resource activity was strong in the survey period, compared with three points in Ontario, where manufacturing has beginning to stagnate.

StatsCan said the study uncovered three main findings.

"The first is that while the oil boom seen during much of the 2000s tended to reduce wage differences across education levels for both young men and young women, the remaining contributing factors differed across gender," according to the study summary.

"Rising real minimum wages and rising relative supply of bachelor’s degree holders tended to reduce the education wage premium for young women but not for young men."

The second important finding was that increases in real minimum wages appeared to have a dual impact on young women, narrowing wage differences between high school grads and degree-holders but widening the gap in full-time paid employment.

Finally, the narrowing of the wage gap between degree-holders and those with only high school diplomas overall was offset by the wider differences in full-time employment rates between the two groups.

[ Related: Students continue to choose degrees with low-earning potential ]

The study said several factors influenced the demand for workers with high school diplomas compared with bachelor's degrees. The price of oil earned by Canadian producers doubled from 2000 to 2008, coinciding with a sharp increase in housing demand that may have combined to push up wages for high-school grads.

Meanwhile, declining prospects in the tech sector after 2001 may have helped push down the so-called education wage premium by reducing the demand for bachelor's degree holders. However, the gap may have been offset somewhat by weak demand for high school grads in the Central Canada's manufacturing sector due to the rising dollar.

Still, the study found that over time, university grads still come out ahead. Male bachelor-degree holders earn about a dollar for every 75 cents earned by high school grads. The gap is wider for female high school grads – 68 cents for every dollar earned by their university-grad counterparts.

Lesser-educated women benefited more than men from increases in provincial minimum wages, the study said. Meanwhile, more women were going to university, up 42 per cent between the two sampling periods, compared with just 30 per cent for men.

So for all those art history grads dispensing lattes or flogging fashions, there's hope.