A master’s degree can put an additional $21,000 in your pockets two years after completion, but won’t equalize earnings across gender.
Those two findings appear in Statistics Canada survey that tracked the earnings of 1.3 million students who graduated with a Canadian post-secondary degree between 2010 and 2015.
The study broadly confirms the theory that higher levels of education led to higher earnings. When comparing earnings of graduates with different types of degrees, the largest gap appears between the earnings of undergraduate and master’s degree holders.
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“For every graduating class from 2010 to 2015, master’s degree graduates were making, on average, 40 per cent to 47 per cent more than undergraduate degree holders two years after graduation — a difference in median employment income ranging from $18,100 to $21,200,” it reads. Master’s graduates of 2012 had a median employment income of $65,700 while undergraduate degree holders made $46,600 in 2014.
This income gap between undergraduate and master’s degrees closes somewhat over time, but remains pronounced. Five years after graduation, the difference still remains at 31 per cent.
Notably, the difference between a master’s degree and a doctoral degree is the smallest by comparison. Two years after graduating, doctoral degree holders earn four per cent more than holders of master’s degrees. Five years after graduation, the gap has risen to six per cent.
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The report also suggests that timing and gender matters. Individuals who switch into a master’s degree mid-career get a bigger boost from their investment than their younger counter-parts. Older students who graduated with a master’s degree in 2015 earned, on average, 43 per cent more than their younger counterparts two years after graduation. Employers in other words value employees who can combine experience with education. The report does not say whether one factor makes a bigger difference than the other.
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Finally, the report confirms an ongoing and persistent gender pay gap across education levels and occupation. Controlling for various factors, including education, female employees earn 13.3 per cent less per hour, on average, than men. While this gap is generally lower at higher levels of education, it can nonetheless range significantly and actually increases over time.
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