By Armina Ligaya, Financial Post September 9, 2013 - Canadians who complete an apprenticeship earn more than community college graduates and almost as much as those with some university education — but only if they’re male, according to a new University of Toronto study.
Men who acquire apprenticeship credentials earn 21.4% more than those that do not complete high school, compared with just 19.3% more for community college graduates and 11.1% more for trade certificate holders, according to a working paper by U of T professor and CIBC chair of youth employment Morley Gunderson and associate professor Harry Krashinsky.
“Returns for males were certainly as good as returns for getting a community college [diploma]. They were not as good as getting a university degree, but nevertheless, they were quite high,” said Mr. Gunderson.
However, female apprentices in Canada did not fare as well.
For women, taking the apprenticeship route only led to a 7.1% earnings premium over those who do not complete high school.
The study is one of the first in Canada to attempt to calculate the real return on apprenticeships compared to other career paths, said Mr. Gunderson. Calculations were based on Canada’s 2006 census, the only data set to include separate information on apprenticeships, he added.
Getting a clear picture of the utility of different career paths is crucial for the next generation, given the difficult employment outlook amid a slow recovery from the last recession.
The gap between adult and youth unemployment in Canada is now the widest in 35 years, at 2.4 times that of adults, according to a June report from Statistics Canada. Meanwhile, a recent CIBC study showed that the return on university degrees isn’t as high as it used to be, with fine arts and applied arts graduates earning 12% less than high school graduates once their education costs are factored in.
Canadians are increasingly being encouraged to enter trades such as carpentry and plumbing amid worries of a looming skills shortage.
The study, done through the University of Toronto Centre of Industrial Relations and Human Resources, suggested that there is also a monetary advantage to pursuing an apprenticeship.
“Now that we finally have some data on apprenticeship trades, as opposed to them being blended in with trade certificates… the apprenticeships seem to do quite well,” Mr. Gunderson said.
The benefits do not extend to women the same way, the study concluded, indicating that women were better off not doing an apprenticeship at all and simply completing high school. That group earned a 9.4% premium over non-high school grads, the study showed.
“For females, the returns [on apprenticeships] are terrible,” Mr. Gunderson said.
It is more lucrative for women to attend community college or some university, as those groups earned a 17.1% and 26.7% premium, respectively, over those who do not complete high school, the U of T data suggested.
One factor behind the discrepancy between the genders is that apprenticeships with lower earning potential, such as hair styling, typically have more men than women enrolled, Mr. Gunderson said. Another factor is the harassment experienced by some women entering male-dominated trades that are more lucrative, he added.
“There is a fair amount of evidence of harassment and discrimination,” he said.
As well, fewer women than men overall obtain apprenticeship credentials — just 1.5% of women versus 7% of men, the study showed.
Still, university degrees remain a far more lucrative career path, for both men and women.
Males with a university degree in Canada earned 41.5% more than those without a high-school diploma, while women earned 40.8% more, the study showed.