Higher Education

University Grads Make More Money Over Time

According to a recent study from the University of Ottawa, the cost of higher education is still worth it. University degrees are linked to higher salaries almost regardless of the subject. 🙂

The study published this week looked at income data for 620,000 graduates of 14 different universities and colleges between 2005 and 2013, spanning an 8 year period to gauge progress over time.

On average, graduates from universities in 2005 made $45,200 in inflation-adjusted income in their first year after school. This number increased every year after that, growing by a total of 66% to $74,900 in 2013, which covers an 8 year period. But college graduates started off somewhat lower. The average income for a new college grad was $33,900 in 2005. After 8 years it has grown by 59% to reach $54,000. These numbers only represent the average. Individual results of a college or university education can be very different from one person to another.


A closer look at the study’s findings reveal a big difference by gender. Both men and women start off making about the same after graduating university. But 8 years later, those averages diverge. The typical male university graduate who started working in 2005 was making 91% more money by 2013. His female counterpart who graduated with him saw her income only increase by 42% from 2005 to 2013.

I think there are a couple of main reasons for the gender discrepancy in income growth.

  1. Men and women tend to choose different majors. STEM fields, particularly technology and engineering, are pursued more by men than women. These fields also consistently offer lucrative career paths.
  2. Many women tend to take time out of the workforce to raise children. This is due to a fact of nature. Nearly every research has shown breastfeeding increases a baby’s intelligence. Men can’t give birth or breastfeed.

Higher Education in Universities

As with any report we have to consider any hidden agendas. A university study that concludes going to university is a good decision is like a real estate agent advocating for home ownership. It doesn’t mean they’re wrong, but we should be aware of the bias. 😉 We can also keep in mind that university graduates have been pre-screened to have certain qualities like being smart or ambitious enough to attain high grades in high school. These personality traits often lead to higher earnings regardless of attending university; correlation ≠ causation.

Higher education isn’t for everyone. Some folks excel at formal education, while others do better with a trade or entrepreneurship. The important thing to remember is that learning is a lifelong process and we can pursue it in many different ways. 🙂

Random Useless Fact:



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Investing Pursuits
07/28/2016 8:43 am

Liquid, I think getting a University education is worth it, but each individual has to pick the right program for themselves. Picking the right program for one self is not always easier. Take engineering for example. People choose engineering because they are good in math and they figure it would be easier to get a job than with a math, chemistry or physics degree. To get a good engineering job, an engineer needs really good communications skills. So, if the engineer is have good communication skills they either have no job in the field, work in a lab setting, or have to try to get a PhD to possible teach and do research. I think universities or guidance counsellors should tell students what engineering is really like. I found out in year 3 of 5 when a professor said, “Engineering is 80% communication, get could at it !!”. Engineering use to be a 5 year program in Nova Scotia and changed in 1997 to a 4 yr program. In any type of job that requires university education, you can tell the difference between people who actually want to do that type of job and from those that are working there… Read more »

Financial Canadian
07/28/2016 12:46 pm

I will never doubt the merits of a university education. Workplace merits aside, I think it allows you to think better and just be wiser in general. My education has had a huge effect on many aspects of my life and has been formative in all the accomplishments to date.

07/29/2016 6:07 am

“…it allows you to think better and just be wiser in general.”

Disagree. A person has to have the innate capacity to harbour and cultivate those two qualities: critical thinking and wisdom. Plenty of ignorant degree holders out there.

There is a vast difference between having an education and having a degree.
Just ask George Washington or Andrew Carnegie. 🙂

07/28/2016 4:54 pm

I think too many people go to University without any idea of what they want to do. Unless University is nearly free, its not a good way of “discovering” what you want to do. It might be better to find a way to volunteer and travel, or both. Mature a little and set yourself some goals first. Think about what you want to do for the rest of your life. Then pursue it. Passion for what you do will take you far.

07/29/2016 5:58 am

“These personality traits often lead to higher earnings regardless of attending university; correlation ≠ causation.”

Nuff said.