Know How Workers In Canada Benefit From Short Postsecondary Courses

Last Updated On 13 February 2023, 9:39 AM EST (Toronto Time)

On November 23, 2022, Statistics Canada published a study exploring the extent to which recently unemployed people experienced relatively high earnings growth when they used different educational strategies.

These strategies included taking short credits and postsecondary courses. Employees who leave their jobs experience financial hardship for years.

Going back to school before entering the workforce again is one approach to deal with losing a job, but because of their financial obligations, laid-off employees might not have much time for self-improvement.

Therefore, after being laid off, evaluating the costs of returning to school versus the potential rewards of doing so is crucial.

Further, it shows how postsecondary courses may help Canada’s current workforce. The study follows people from seven years before the layoff to five years after the layoff to evaluate this goal.

It focuses on people who lost their jobs between 2010 and 2014 and used administrative data from the Census of Population to accomplish so.

As a result, virtually all public postsecondary institutions in Canada can have their educational activities monitored by the study. 

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Having a college or CEGEP degree or diploma is linked to higher wage growth after job loss

Individuals who got a college or CEGEP credential (typically a one-year commitment) shortly after job loss saw their average yearly earnings increase by more than $7,000, from $35,900 one year before to the layoff to $43,100 five years afterwards.

Likewise, individuals who earned a college or CEGEP credential (typically a two- or three-year commitment) had a nearly $10,000 rise in annual wages over the same time period (from $34,200 to $43,800).

In comparison, displaced workers who obtained a micro-credential, which is shorter than a certificate or diploma, had a relatively minor gain in earnings, around $1,300.

The earnings increase for displaced workers who completed a micro-credential was slightly lower than for displaced workers who did not return to school.

Nevertheless, the latter group’s average annual earnings increased by nearly $2,400, rising from $48,700 one year before job loss to $51,100 five years afterwards.

After accounting for the influence of other factors, such as changes in personal traits, job characteristics, earnings levels, and earnings growth rates reported among diverse groups of displaced workers before job loss, all of the study’s conclusions held up.

Graduates in science, technology, engineering, mathematics, and health programs had the highest salary rise after job loss

Following a job loss, persons who completed short programs (a micro-credential, certificate, or diploma) in Science, Technology, Engineering, and Mathematics- (STEM) or Health-related areas had considerably quicker wages rise than other graduates.

Displaced workers who completed short STEM or health-related programs saw their average annual earnings increase by nearly $12,000, from $36,100 one year before the layoff to $47,700 five years later.

On the other hand, those who graduated from short programs in other fields experienced a $3,000 gain in average wages throughout the time, somewhat ahead of those who did not return to school (+$2,400).

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Enrollment with no postsecondary credential is not associated with greater wages after job loss

Many workers who choose to return to school either did not complete their program or began with lower commitments, such as independent credits (not related to a degree or credential), basic skills training, or high school upgrading.

It could have been due to pressing financial obligations after a job loss.

Displaced workers who adopted these strategies did not enjoy higher wage growth than displaced workers who did not return to school. 

Individuals who returned for basic skills training or high school upgrading saw a drop in earnings one year before job loss and five years later. 

Such a reduction could represent skill limitations suffered by this group upon re-entry into the labour market, which could not be accounted for in the study.

Returning to school is not a common option after a job loss

Despite the potential economic benefits of returning to school after losing a job, most displaced workers did not pursue this plan of action. 

According to a recent Statistics Canada research, 4.0 percent of workers who lost their jobs during the recession in 2009 returned to school that year, compared to 1.9 percent of all workers.

By 2018, 14.1% of workers who had been laid off during the 2009 recession had returned to school, compared to 9.8% of others.

As a result, the study shows that returning to school after a job loss may result in a higher wage increase. 

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