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Education the antidote for youth unemployment – especially in Canada: OECD

The OECD’s new report, Education at a Glance 2013: OECD Indicators, found that 51 per cent of adult Canadians had some sort of post-secondary educational qualification as of 2011, up a massive 11 percentage points since 2000.

Brian Snyder/Reuters

Youth unemployment has been the scourge of much of the developed world throughout the recession and recovery, but the data show that higher education may be the greatest antidote for this economic toxin. Fortunately, the Organization for Economic Co-operation and Development finds, Canada's young work force has profited from one of the strongest education systems in the industrialized world.

The OECD's new report, Education at a Glance 2013: OECD Indicators, found that 51 per cent of adult Canadians had some sort of post-secondary educational qualification as of 2011, up a massive 11 percentage points since 2000. That rate of post-secondary education is tops in the 34-country OECD, where the 2011 average was 32 per cent.

For those who still think university degrees are an expensive ivory-tower navel-gazing waste of time (and after spending seven years on various campuses, I admit there were times I would have agreed), the hard statistical facts suggest that higher education has been a fantastic defence against the unemployment line. Across all OECD countries, people with post-secondary education (or "tertiary," as the OECD prefers to call it) had an unemployment rate of 4.8 per cent in 2011; for those who hadn't completed their secondary education, it was 12.6 per cent. And the gap widened substantially during the recession; the unemployment rate for the highly educated rose just 1.5 percentage points from 2008 to 2011, versus 3.8 percentage points for those with low education levels.

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The report also found that higher academics are a bigger factor in employment for younger workers than for older ones. Across the entire OECD, the unemployment rate for 25-to-34-year-olds who hadn't completed secondary education was 18.1 per cent in 2011; for those with tertiary qualifications in the same age group, the unemployment rate was a mere 6.8 per cent. For workers aged 55-to-64, the gap was far less pronounced: 8.8 per cent for those without a secondary education, 4 per cent for those with a tertiary degree.

"Without the foundation skills provided by a minimum level of education, people find themselves particularly vulnerable in an insecure labour market," wrote OECD Secretary-General Angel Gurria in the report's introductory editorial.

Higher degrees are also more profitable: Across the OECD, tertiary-educated adults earn an average of more than 1.5 times what adults with upper-secondary educations earn. And again, the gap has widened since the recession and financial crisis.

The report suggested that for Canada, its high commitment to higher education has served its population well. From 2008 to 2011, the unemployment rate for tertiary-educated Canadians rose a mere 0.9 percentage points, compared with 2.6 percentage points for those who hadn't completed a secondary education. Canada's unemployment rate in general, and the degree of erosion in its job market, were considerably less than the OECD average (though that may well have had more to do with the stability of its economy than with its educational advantages).

Curiously, though, Canada's public investment in the education system looks, at best, mixed. Public funding for education at all levels in Canada accounts for a modest 76 per cent of total educational funding, well below the OECD average of 84 per cent. At the tertiary level, Canada's public funding pays for just 57 per cent of the total bill, compared with the OECD average of 68 per cent. And Canada's university tuition fees are among the highest in the OECD. If Canada is to maintain its educational edge at the higher levels, it's going to have to address these public-funding shortfalls.

On the other side of the educational coin, though, Canada ranks highly in its compensation to educators. The average teacher in Canada, across all educational levels, earned $56,000 (U.S.) in 2011 – about 45 per cent more than the OECD average.

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About the Author
Economics Reporter

David Parkinson has been covering business and financial markets since 1990, and has been with The Globe and Mail since 2000. A Calgary native, he received a Southam Fellowship from the University of Toronto in 1999-2000, studying international political economics. More

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