During the past twenty years, the educational attainment level of Ontario’s population has increased dramatically. The number of individuals residing in Ontario with post-secondary education (PSE) has more than doubled since 1990. With such rapid expansion, there is always the concern that there are now too many PSE graduates in Ontario, leading to higher unemployment rates and/or underemployment rates. On the other hand, it has been argued that Ontario is still lacking PSE graduates with the right skill set to match labour market needs (Miner, 2010). Moreover, it is forecast that 70 per cent of new jobs created in Ontario will require PSE. In order to meet this expected need, the Ontario government seeks to increase the percentage of citizens with PSE attainment from 62 per cent to 70 per cent (Throne speech, 2010).
Is the Ontario labour market able to absorb these PSE graduates? This paper will address this concern through an examination of the early labour market outcomes of graduates in the period between 1982 and 2005. The primary dataset used in this study is from Statistics Canada’s National Graduates Survey (NGS) and Follow-up of Graduates Survey (FOG), which surveyed PSE graduates two and five years after graduation, respectively. There are a total of six cohorts available, including those who graduated in 1982, 1986, 1990, 1995, 2000, and 2005. The class of 2005 does not have a FOG because this survey was terminated after the 2007 NGS. Using all six available cohorts of NGS/FOG data, the following research questions are examined:
1. What is the trend of Ontario PSE graduates’ labour market outcomes between the cohorts of 1982 and 2005?
2. How do the labour market outcomes of Ontario PSE graduates compare to the rest of Canada?
3. Do Ontario PSE graduates’ labour market outcomes improve between two and five years after graduation?
4. How do labour market outcomes differ among graduates with different levels of credentials?
Among the cohorts examined, the unemployment rate of Ontario PSE graduates ranged between 4 per cent and 9 per cent two years after graduation and between 2 per cent and 7 per cent five years after graduation. PSE graduates’ unemployment rate two years after graduation mirrored the overall unemployment rate trend in Ontario and the rest of Canada over the examined period.2 However, Ontario PSE graduates’ unemployment rate five years after graduation was generally lower than the rest of Canada except graduates with advanced degrees from cohorts 1990, 1995 and 2000.
Over the cohorts examined, neither bachelor’s degree holders nor college graduates saw consistent growth in their real earnings, while the earnings of graduates with advanced degrees increased steadily. Between two and five years after graduation, PSE graduates’ earnings increased by between 15 per cent and 35 per cent, depending on credential level and cohort. Graduates with higher credentials were rewarded with higher earnings, and the earnings gap among credentials increased between two and five years after graduation. Compared with their counterparts in the rest of Canada, Ontario PSE graduates earned more, and the earnings gap was greater five years after graduation than it was two years after graduation.