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Skills and Higher Education: Why We Should Care

Feb 03, 2014
Daniel Munro
Principal Research Associate
Centre for Skills and PSE

The Centre for Skills and Post-Secondary Education (SPSE) at the Conference Board of Canada is developing a plan to renew the roles, structure, activities and impact of the post-secondary education (PSE) system so that we can graduate more people with advanced skills. It is motivated by a belief that a highly skilled population is essential to Canada's economic prosperity and social well-being, and to the health and welfare of individuals.

But is that belief justified? Having a highly educated and skilled population is often touted as both good and necessary. And governments worldwide have made big investments in their skills and PSE systems to produce more skilled graduates. Do these investments have a sound rationale? Although we often assume that skills and education matter for economic and social well-being, revisiting the evidence is a worthwhile exercise.

Why are Skills and PSE Important?

  1. Skills and education are key determinants of economic productivity and growth.
    According to the OECD, differences in average literacy skills explain 55 per cent of the variation in economic growth among OECD countries since 1960.1 Although Canada has leading levels of PSE educational attainment, which helps literacy, we lag competitors in advanced degrees (Masters and PhDs) and workplace education and training. This may help to explain why Canada trails international competitors in productivity growth and innovation, usually earning a C or D grade in each, relative to international peers, in the Conference Board's How Canada Performs report card.
  2. Individuals with advanced skills and education do better in the labour market than those without.
    Canadians with less than a high school diploma have an employment rate of only 55 per cent, while those with university degrees or college diplomas have employment rates of 82 and 81 per cent, respectively.2 Before spiking in all categories during the economic crisis, unemployment for Canadians with a university degree was nearly two thirds lower the rate for those without high school completion (4.1 per cent versus 12.0 per cent). For those with college or a trade certificate, the rate was 4.8 per cent. By 2011, unemployment was only 0.8 per cent higher (to 4.9 per cent) for those with a university degree and 1.1 per cent higher (to 5.9 per cent) for those with college or trade credentials versus still 3.4 per cent higher (to 15.4 per cent) for those without a high school diploma.3 (See Chart "Unemployment rates aged 15 and over, by educational attainment"). Finally, although there are differences across disciplines, higher education credential holders aged 25 to 64 earn, on average, 39 per cent more than high school graduates.

  3. Unemployment rates aged 15 and over, by educational attainment, Canada, 2005 to 2012
    (per cent)

    Image of a chart showing unemployment rates aged 15 and over by educational attainment

    Source: Statistics Canada (81-582-X), 2013.

  4. Highly educated Canadians are more active in their communities and politics.
    Canadians with a university or college education are much more likely to volunteer in their communities than those with a high school education or less. In 2010, 58 per cent of adults with a university degree and 45 per cent with a post-secondary diploma or certificate reported doing volunteer work compared to 43 per cent with a high school education and only 37 per cent of adults with less than high school.4 Similarly, an analysis of the 2011 federal election shows that while 78 per cent of people with a university degree voted, those with a high school education or less voted at rates of only 60 per cent or less.5


  5. Advanced skills and higher education are associated with better physical and mental health.
    As skills and educational attainment increase, so does the ability to find secure, well-paid employment; find, understand, and follow health information; navigate the health system; and acquire the resources needed to lead a healthy lifestyle.6 Given Canada's high rate of tertiary educational attainment, it is not surprising to find that Canadians are among the world's healthiest citizens.7


Individuals and communities with higher levels of skills and educational attainment are also better equipped to enrich their knowledge of self and the world. Although this is harder to quantify (and arguably should not be quantified), the capacity to engage in critical reflection about oneself, one's community, and the world, is an essential component of a good life.

To be sure, skills and education are not the only factors shaping economic, health, and social outcomes and we should not expect good results simply by increasing the number of PSE graduates. Moreover, there are additional questions to answer—such as how to achieve a fair distribution of educational opportunities and benefits, what proportion of costs should be covered by public versus private resources, what can be done to sustain and enhance the system that produces benefits, and which skills contribute to which results and how. These and other issues will be addressed in future SPSE research and commentaries. Still, the evidence shows that skills are critically important and that efforts to ensure that Canada's PSE system continues to produce highly skilled graduates are well-founded.

1  S. Coulombe, J.F. Tremblay and S. Marchand, Literacy Scores, Human Capital and Growth Across Fourteen OECD Countries, International Adult Literacy Survey Series (Ottawa: Statistics Canada, 2004).

2  Ministry of Training, Colleges, and Universities, Ontario Labour Market Statistics for January 2012, 2.

3  Statistics Canada, "Unemployment rates of population aged 15 and over, by educational attainment, Canada, 1990 to 2012."

4  M. Vézina and S. Crompton, Volunteering in Canada (Ottawa: Statistics Canada, 2012), 41,42.

5  S. Uppal and S. LaRochelle-Côté, Factors associated with voting (Ottawa: Statistics Canada, 2012), 6.

6  Chief Public Health Officer of Canada, Report on the State of Public Health in Canada 2008 - Addressing Health Inequalities (Ottawa: Public Health Agency of Canada, 2008). See chapter 3.

7  World Health Organization, Canada: Health Profile (Geneva: WHO, 2013).

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