Milde: Debate not aided by sweeping, misdirected judgments
By Michael Milde
October 10, 2013
Benjamin Tal and Emanuella Enenajar don’t think students should study English, Psychology, Philosophy, History or any of the humanities. They argue these subjects are a bad investment: “And despite overwhelming evidence that one’s field of study is the most important factor determining labour market outcomes, today’s students have not gravitated to more financially advantageous fields in a way that reflects the changing reality of the labour market.”
This is the punch line of Degrees of Success: The Payoff to Higher Education in Canada, a report published recently by CIBC World Market Inc.
There is one problem with this punch line – it isn’t true, at least not according to the analysis contained in the report itself, and certainly not according to the key StatsCan report on which Tal and Enenajar base their assessment of fields of study. On the evidence, it is clear immigration status and gender have an important effect on labour market outcomes. Field of study is largely immaterial.
Degrees of Success starts with the observation Canada has the highest proportion of postsecondary degree and diploma holders in the developed world. The authors then note Canada also has the highest proportion of university and college graduates earning less than half the median national income.
Most people expect an advanced education to yield a good job and a good salary. So what accounts for this paradoxical outcome?
Tal and Enenajar note the immigration status of degree and diploma holders has an important impact; degrees earned outside of Canada are not always recognized by potential employers, recent arrivals may struggle with Canada’s official languages, and are affected by the cultural dislocation associated with immigration. When you consider 20 per cent of the Ontario population was born outside of Canada, it becomes clear the impact of immigration status becomes significant in the labour market.
Similarly, Tal and Enenajar observe, in passing, gender has an impact on labour market outcomes. They note, first, “the ROI (return on investment associated with university degrees) is typically higher for females than males, not due to higher future earnings, but reflecting the lower foregone income of female students.”
In a roundabout way, this statement recognizes women typically earn less than men, so any gains they make through a university education will be disproportionately positive, even if the absolute value of that gain is not very significant. So, more and more women attain a university education, but continue to experience lingering discrimination and the familiar challenges of juggling parenting expectations and professional work, together with the systematic debasement of ‘women’s work.’ As a result, the proportion of university- and college-educated persons earning relatively low wages is going to rise.
Tal and Enenajar almost realize this – but end up getting it backward: “What’s more, the rising participation of women in higher education might be raising the ranks of students in subject areas where women are disproportionately represented – the arts and social sciences – fields that are typically lowering paying.”
Why is this conclusion backwards? Because the problem is the fields may well be “typically lower-paying” precisely because they attract larger numbers of women, who have been traditionally disadvantaged in the marketplace. At the very least this is a possibility that needs to be investigated before one can firmly conclude certain fields of study lead to lower incomes.
So what about the claim the humanities, as a group, are a ‘low return field’?
Psychology, humanities, Social Science and Education are all clearly ‘losers’ with more than 30 per cent of these graduates earning less than half the median national wage.
At least, that is what it looks like.
But before you can conclude there is a causal relationship between the choice of a field of study and a low rate of return, you need to consider all of the reasons why some university graduates are earning less than others. (It is also interesting to note even supposedly “high return” fields such as Engineering, Health and Business have more than 20 per cent of their graduates below the median income).
To make this causal claim, Tal and Enenajar fall back on anecdotal argument: “Most Canadians are aware that on average your odds to earn more are better with a degree in engineering than a degree in medieval history.”
As an argument, this is little better than speculation.
Consider an argument that works with the available data. The chart illustrating disciplinary diversity is derived from a Stats Can document, The High Education/Low Income Paradox: College and University Graduates with Low Earnings, Ontario, 2006. The authors of this document see the paradox as the product of multiple variables (including immigration and gender, noted above).
Here is what they conclude about the effect of ‘field of study’ on income potential: “The analysis finds that, once controlling for the influence of all other factors, no one field of study stands out as being more likely than the others to lead to an individual being in a low earnings situation.”
How about that? If you look at the entire situation, and consider all of the factors that have an influence on income potential, it turns out choice of field of study is immaterial.
So, say the people who gave us the raw data Tal and Enenajar use to suggest certain fields lead to low incomes. Did Tal and Enenajar control for these other factors? Apparently not.
What lessons might one take away from this analysis of Degrees of Success?
First off, Canada needs to consider the status of immigrants and women in the labour market. There is certainly evidence, from many sources, to support that claim. Our record on this score is clearly not impressive.
Canadians also need to continue to discuss and debate the purpose of university education. Degrees of Success has as its central premise that the chief reason people choose to pursue postsecondary education is monetary gain, a premium in wages over what can be earned with only a high school diploma. Doubtless that is a part of the general motivation, but it is also possible individuals are motivated to acquire education because they are curious about the world and want to expand their knowledge and enhance their creativity. Some individuals will also prefer a career that is satisfying to one that is high-paying.
The list of considerations is long, and the determination of what weight to assign to each item is complicated. But the discussion of the value of postsecondary education is not aided by analyses that make sweeping judgments based on a misreading of the available evidence. Students deserve better than that, as do all those who care about the future of education in Canada.
Michael Milde is the dean of Western’s Faculty of Arts & Humanities.
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