High school academic performance and earnings by postsecondary field of study

Selecting a field of study is an important decision made by thousands of incoming postsecondary students each year. Numerous studies have shown that graduates from engineering, business and mathematics programs earn considerably more than their counterparts from arts and humanities. These earnings disparities may reflect differences in skills that are independent of the programs themselves, rather than supply and demand conditions. Estimating earnings differences between graduates from various programs—net of pre-existing skills differences—is thus a critical first step in understanding the true value associated with the field of study choices. This article informs our understanding of this issue by estimating the earnings differences across various fields of study after adjusting for differences in high school academic performance (course marks), neighbourhood factors (income and educational attainment) and postsecondary institution effects. Using a variety of administrative data sources, British Columbia high school graduates who later completed a postsecondary certificate, diploma or bachelor’s degree program in Canada were followed in the labour market for five years after postsecondary graduation. The study found that despite important differences in high school academic performance among individuals who later completed a bachelor’s degree, the earnings ranking of the fields of study was not substantially altered after considering the differences in these measures. Interestingly, bachelor’s degree graduates of physical and life sciences and technologies programs registered average earnings (for men) or below average earnings (for women) despite being among the top academic performers in high school. By contrast, male and female graduates of business, management and public administration programs were among the highest earners despite registering average academic performance in high school. Among certificate and diploma graduates, earnings differences by field of study were smaller than among their counterparts who graduated with a bachelor’s degree, but again, high school academic performance played little to no role in understanding these differences. In general, the remaining earnings differences across postsecondary fields of study may be related to unobserved factors such as non-cognitive skills acquired before postsecondary education, or they may signal differences in the supply and demand conditions (i.e., economic returns) associated with these fields. Older survey data show that patterns in selected non-cognitive skills measured in high school are not consistent with the earnings differences by postsecondary field of study estimated in this study, suggesting that supply and demand conditions could explain earnings differences by field of study (as opposed to selection effects).