Where Ontarians get their undergrad degrees isn’t key to early success

Published in the Financial Post

As Ontario’s Grade 12 students return to school this month, university rankings, campus tours and application deadlines will raise many families’ stress levels about getting into the “right” university. But, as we show in our new report for the C.D. Howe Institute, the data suggest that where most Ontario students get their bachelor’s degree matters less for their early-career earnings than you might think.

We tracked the post-graduation outcomes of more than 300,000 bachelor’s graduates from across Ontario from 2013 to 2019, using linked Statistics Canada education and income tax data. We examined both their employment earnings and their enrolment rates in graduate or post-bachelor professional programs.

What we found is that three years after graduation, students from universities classified as “medical-doctoral” in the annual Maclean’s rankings come out modestly ahead, with annual median employment earnings of $69,500. For their part, graduates from comprehensive and primarily undergraduate universities had median earnings of $62,400 and $60,200, respectively, while those with bachelor’s degrees from colleges made $58,100.

These earnings differences persist even after we account for student demographics, undergraduate program and other factors. Graduates of non-medical-doctoral institutions remain clustered, earning roughly eight to 11 per cent less than their medical-doctoral counterparts, a finding consistent with the few previous Canadian studies on this topic.

This relative parity may seem counterintuitive. But it’s what we should expect to see given the structure of Ontario’s post-secondary system. Institutional status and financial resources, including endowments, differ only modestly among Ontarian universities when compared with universities in the United States. Provincial policy-makers here have historically resisted the urge to establish a hierarchical system with formally designated “flagship” institutions. Except in certain fields, Canada’s elite universities are not as selective as top American schools like Harvard, Yale, Princeton or Stanford, or British ones like Oxford and Cambridge.

Institutional reputation does likely matter in particular programs, industries and regions — something prospective students should research thoroughly before making their decisions. But, in general, where you get your bachelor’s degree doesn’t seem to make or break your early earnings outcomes.

Where it does appear to matter much more is in what students do next — though that’s a distinction that seldom enters the public discussion about choosing a university. Roughly 32 per cent of graduates from medical-doctoral universities enroll in graduate or professional programs (e.g., law) within three years of graduation. For graduates of comprehensive schools that number is just 22 per cent, for those from primarily undergraduate institutions 21 per cent, and for graduates of colleges only about five per cent.

These gaps narrow, but don’t entirely disappear, when we account for available demographics, undergraduate program and other contributing factors. Graduate and professional degrees do often increase people’s earnings over the long term, and that may lead to much different outcomes than the modest income differences we see at the three-year mark. That could be a moot point, of course, for students planning from the start to enter the labour market without further graduate or professional study.

Canadian students and their well-intentioned parents should remember that our post-secondary system doesn’t necessarily resemble the Ivy League world portrayed on American television. Prestige matters less and students should also weigh factors such as program fit, location, educational experience and whether they intend to pursue further education.

Roger Pizarro Milian is an adjunct professor at the University of Guelph, David Zarifa a professor of sociology at Nipissing University and David Walters a professor of sociology and anthropology at the University of Guelph.