Community College B.A. Shows Early Earnings Edge

Graduates of bachelor's degree programs at Canadian community colleges initially earn 12 percent more than university-educated counterparts, but their advantage quickly starts to shrink.

September 19, 2019
 
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Students who earn four-year degrees at community colleges in Canada earn on average 12 percent more two years after graduation than students who earn bachelor’s degrees at universities, according to a new analysis of graduate and personal income tax data published by the governmental research agency Statistics Canada.

The study found that the earnings advantage for the community college graduates is almost entirely attributable to their field of study. Compared to students who study at universities, the students who earned bachelor’s degrees at community colleges were more likely to enroll in programs associated with higher earnings including business, public administration and health-related fields.

The analysis further found that the remainder of the earnings gap not explainable by field of study is attributable to age. The community college bachelor’s degree recipients were on average two years older than their university-educated counterparts.

The study was authored by Marc Frenette, a research economist at the Canadian statistical agency focused on higher education and the labor market. Frenette found that while holders of bachelor’s degrees from community colleges enjoy an initial earnings advantage, their university-educated counterparts quickly begin to catch up. University bachelor’s degree holders see their incomes grow faster rates between two and five years after graduation than their community college-educated peers, and by the end of that five-year period, their initial earnings advantage of 6,000 Canadian dollars ($4,452) is halved to about 3,000 Canadian dollars ($2,222).

The university-educated students are also nearly five times as likely to enroll in graduate studies within two years of graduation (11.9 percent), compared to students who hold bachelor’s degrees from community colleges (2.5 percent).

The study offers new insights into the labor outcomes of bachelor’s programs at community colleges, which proponents support as a means for expanding access to students who otherwise might not pursue a four-year degree for reasons related to location and cost.

Still, support for these programs has been uneven in the United States. Half of U.S. states permit community colleges to offer bachelor’s degrees, according to a recent estimate published in Washington Monthly, but only two states, Florida and Washington, offer these programs at significant scale. A total of 121 community colleges offer four-year degrees, with three-quarters of graduates of these programs coming from Florida and Washington.

Frenette found that Canadian community colleges account for 4.3 percent of bachelor’s degrees awarded and that the programs are heavily concentrated in three provinces: Alberta, British Colombia and Ontario. Colleges and Institutes Canada, a membership association, reports that 87 of its member institutions offer four-year degree or postgraduate programs, including 368 bachelor’s degrees.

Frenette found that the community college bachelor’s programs tend to be concentrated in institutions that are located near universities and which have higher average earnings for their graduates compared to other colleges.

“Given these findings, it is not clear whether the results from this study would still apply if CBD [college bachelor degree] programs were to expand to other institutions, including those in more rural or remote areas and those associated with lower earnings among their diploma graduates,” Frenette wrote.

Leesa Wheelahan, the William G. Davis Chair in Community College Leadership at the University of Toronto’s Ontario Institute for Studies in Education, said the study “filled a very important gap in our understanding of what the outcomes of college degrees are.”

“It’s sort of contradictory in a way,” Wheelahan said. “It shows the value of those degrees, and it also shows us where the challenges are and where we need to do more policy work. And the challenge is to support these students to get into master’s degrees.”

Iris Palmer, a senior adviser for higher education and workforce at Washington, D.C.-based think tank New America, said that the findings seem -- at least preliminarily -- in line with research in the U.S. Palmer pointed to a study that found that graduates of community college bachelor's degree programs in nursing and business administration have comparable short-term employment outcomes to graduates of university-based programs. (Editor's note: This article has been corrected to delete an inaccurate citation to this study.)

Palmer also pointed to an analysis of statewide data in Florida that found that graduates of bachelor's degree programs in the Florida College system have higher median wages one and five years after graduation compared to students who completed bachelor’s degrees in the state university system (see chart below). However, as in the case of the Canadian study, the university-educated students begin catching up quickly. The Florida analysis was done by the American Institutes for Research.

“The analysis that the programs that they choose are more likely to be applied and more likely to be things that are higher paid directly into the field makes a lot of sense,” Palmer said of the Statistics Canada study.

The data set that the Statistics Canada research is based on is relatively new. Frenette, the study author, said the data are not yet available to examine the earnings of community college versus university bachelor’s degree graduates beyond an initial five-year period.

“Just partially for the five-year period that we look at here, they’re starting to catch up,” said Frenette. “It would be very interesting to follow up 10 or 15 years out.”

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