HESA

Higher Education Strategy Associates

Category Archives: data point

May 14

Revisiting the Looming Labour Shortage Theory

Various bits of labour market paranoia have been driving PSE policy lately.  The “skills shortage” is one – even if the case for its actual existence is pretty weak.  Another, though, is the broader idea that we’re about to hit a major labour shortage as boomer retirements… well, boom.  Time to explore that idea a bit.

At the heart of the labour market shortage meme – popularized mainly by Rick Miner in papers such as, People Without Jobs, Jobs Without People, and Jobs of the Future – is the uncontroversial point that the core-working age population (25-54 year-olds) is shrinking as a percentage of the overall population.  As a result, even as population increases, there will be fewer potential workers, hence causing labour shortages, hence leading wages to rise and (though nobody says this part) sending productivity growth into the trash can.  Scary stuff.

But it’s worth examining in more detail how Miner developed his scenario.  To derive labour market demand, he used 2006 HRSDC data on employment growth to arrive at both a 2011 baseline and a 2015 projection, and then assumed that subsequent growth would continue at a pace roughly equal to HRSDC’s 2011-15 projection (0.8% per year).  To derive labor market supply, he applied “current” (the base year is unclear) rates of participation by age group, and applied them forward to 2031.  These estimates produced a potential demand of 21.1 million jobs, and a supply (using his “medium estimates”) of about 18.4 million – a deficit of 2.7 million jobs.

But are constant labour market participation rates realistic?  If labour markets tighten, won’t supply adjust?  Miner seems to make this assumption – not because he thinks it’s true, but because he wants to highlight the scale of the coming transition.  As I showed back here (and as Miner himself notes) we have already seen a shift in the employment pattern of older workers: since 2000, employment rates have been rising 1 percentage point per year among 55-64 year olds, and 0.5 points per year among the over 65s.  And there’s no obvious reason those can’t continue; even if the current rate of growth lasted twenty years, our post-55 employment rates would still be behind the current rates of New Zealand and Iceland.

So, what happens if you replace the no-change projection with one based on employment rates continuing to increase at their post-2000 rate?  Check this out:

Future Employment Rates, Based on Different Assumptions About Employment Rates Among Workers Over 55

 

 

 

 

 

 

 

 

 

 

 

 

That’s a 2.2 million job gap between the two projections – enough to entirely wipe out Miner’s projected shortage.

To be clear, this projection is no better than Miner’s – we’re both just straight-lining different aspects of current reality.  But it does show that the whole “looming labour shortage” meme depends heavily on initial assumptions.

Tomorrow, we’ll look at the policy implications of this.

May 04

Student Stereotypes in Four Graphs

We all know about stereotypes when it comes to students: computer science students resemble characters from The Big Bang Theory, arts students are inordinately fond of hackie-sack, etc. But is there any truth to this?

Well, there is some, as it turns out. About a year ago we asked our CanEd Student Research Panel a series of questions about their attitudes toward academic challenges. The answers we got were interesting because of the way they broke down by field of study. Below are the answers to four questions about academic challenges for the six fields of study for which we had more than 100 observations.

Figure 1 Strongly Agree that “Being Challenged in School is Important to Me”

Slightly fewer business students say they think being challenged in school is very important to them, but not a huge difference across fields of study

Figure 2 Strongly Agree that Classes that Require Application of New Concepts and Techniques are Enjoyable

Engineers like trying new things, business and humanities students less so.

Figure 3 Agree and Strongly Agree that Courses that Require Long Hours of Work are Enjoyable

Are you getting the picture yet? This last one’s my favourite.

Figure 4 Strongly Agree that “I Prefer to Take Courses where the Instructor is an Easy Marker”

In sum, there are moderate but significant differences in academic outlook among students in different disciplines. It’s possible that these traits were acquired while in school, but I would tend towards the view that different academic disciplines simply attract different kinds of students (recall this little beauty from February?). Which in turn makes you wonder if some of the cross-disciplinary differences in learning outcomes that Arum and Roksa found in Academically Adrift  were less of a reflection on the kind of education students receive in different disciplines than and more a reflection of systemic differences in learners’ personalities.

November 16

Helicopter Parents: Grounded?

We’ve all seen stories about “helicopter parents,” parents who hover over their children even after they enrol in university. But most of these stories are American in origin and tend to be anecdotal in nature. What’s the reality in Canada?

A few months ago, we asked our regular CanEd Student Research Panel what kind of on-going involvement their parents had in their lives. Did their parents help them with their homework or help them select courses or extracurricular activities? Had they helped them find a job, or (helicopter alert!) helped them contest a grade? The figure shows the results.

By some distance, the area in which parents gave the most assistance was finding a job, with runners up in assistance with school work, discussing a problem with a professor or administrator, and suggesting extra-curricular activities. Only 3% of students said their parents had behaved in that most helicopter-ish of ways by contesting a grade for them.

Female students were more likely to report having parental involvement in all of the categories compared to male students, and parental education was positively correlated with all categories as well. On academic matters, such as getting help with schoolwork and course selection, parental involvement increased with parental level of education. Anglophone parents were more likely to assist with schoolwork compared to other parents; allophone parents (many of whom are immigrants) were more likely to assist with course selection. Regarding choosing a career path or finding a job, allophone parents were more likely to be involved in choosing a career path, but substantially less likely to be involved with finding a job compared to Anglophone and Francophone parents.

Clearly, helicopter parents are not the norm among Canadian university students. So why do we hear so much about them? For one, they make a great news story. As well, it is possible that even a small percentage of meddling parents can affect institutional work patterns: at a campus of 30,000 students, if 3% of students’ parents call about their children’s grades, that’s 900 parental calls, or at least two calls a day, into the offices of Deans and Student Affairs. If that’s up from 2% a few years ago, that’s an extra 300 calls. That’s certainly enough to cause stories of helicopter parents to circulate, even if they aren’t in fact all that common.

Miriam Kramer and Alex Usher

September 14

Data Point of the Week: StatsCan Gets it Wrong in the EAG

So, as noted yesterday, the OECD’s Education at a Glance (EAG) statfest – all 495 pages of it – was just released. Now it’s our turn to dissect some of what’s in there.

Of most immediate interest was chart B5.3, which shows the relative size of public subsidies for higher education as a percentage of public expenditures on education. It’s an odd measure, because having a high percentage could mean either that a country has very high subsidies (e.g., Norway, Sweden) or very low public expenditures (e.g., Chile), but no matter. I’ve reproduced some of the key data from that chart below.

 

(No, I’m not entirely clear what “transfers to other entities” means, either. I’m assuming it’s Canada Education Savings Grants, but I’m not positive.)

Anyways, this makes Canada looks chintzy, right? But hang on: there are some serious problems with the data.

In 2008, Canada spent around $22 billion on transfers to institutions. For the chart above to be right would imply that Canadian spending on “subsidies” (i.e., student aid) was in the $3.5 – 4 billion range. But that’s not actually true – if you take all the various forms of aid into account, the actual figure for 2008 is actually closer to $8 billion.

What could cause such a discrepancy? Here’s what I’m pretty sure happened:

1) StatsCan didn’t include tax credits in the numbers. Presumably this is because they don’t fit the definition of a loan or a grant, though in reality these measures are a $2 billion subsidy to households. In fairness, the U.S. – the only other country that uses education tax credits to any significant degree – didn’t include it either, but it’s a much bigger deal here in Canada.

2) StatsCan didn’t include any provincial loans, grants or remission either. They have form on this, having done the same thing in the 2009 EAG. Basically, because StatsCan doesn’t have any instrument for collecting data on provincial aid programs, it essentially assumes that such things must not exist. (Pssst! Guys! Next time, ask CMEC for its HESA-produced database of provincial aid statistics going back to 1992!) So, what happens when you add all that in (note: U.S. data also adjusted)?

 

Not so chintzy after all.

August 24

Data Point of the Week: Comparing Academic Salaries

If there’s one subject we write about that gets people riled up, it’s academic salaries in Canada and the U.S. It’s a complicated issue – so let’s look at concrete examples at three of the better-paying Canadian institutions (Trent, Calgary and McMaster) and three prestigious American universities (Dartmouth, Washington and Berkeley).

If you just look at baseline salaries for two sets of institutions, you see some pretty big differences as shown in Figure 1, below. The gap is bigger for associate professors than for full professors, but either way, Canadian professors appear to be making out a lot better than American ones.

Figure 1: Unadjusted Average Base Salaries at Selected Institutions, in Thousands of Dollars.

But this isn’t quite the whole story. Our professors get a 12-month salary, and receive the same pay no matter what they do in the summer months. In the U.S., however, pay is on a nine-month basis – in the summer, many profs are working on research and drawing a separate income from their research grant. Different funders have slightly different rules about how much salary professors can take, but the basic rule of thumb – based on National Science Foundation (NSF) rules that came into effect in 2009 – is that they can take another two months’ worth of salary (i.e., 2/9 of their regular annual pay).

How does that affect average compensation in the U.S.? NSF data seems to indicate that about two-thirds of all professors at research universities hold grants. So, multiplying that out, average compensation across all faculty would look like this:

Figure 2: Adjusted Average Base Salaries at Selected Institutions, in Thousands of Dollars.

At the associate professor level, there is still an advantage to being in Canada – Trent, for instance, still has better salaries than Berkeley. But because promotion carries greater rewards in the U.S., the advantage reverses for full professors. There, all three Canadian universities have higher salaries than the University of Washington, but lower than those at Dartmouth and Berkeley.

If we only looked at research-active faculty, the numbers would look even better for the U.S. than they do in Figure 2. On the other hand, if we look at research-inactive faculty, the accurate comparison is Figure 1.

Another way of putting all this is that for older, research-active faculty, Canadian institutions may still face a bit of a compensation gap. For younger (i.e., associate professor rank) research-active faculty, Canada is the better bet; even Trent  outspends Berkeley. But where Canada really kicks tail is in research-inactive faculty, where faculty at our three selected universities have a collective compensation advantage of almost 25% for associate professors and 10% for full professors.

Which raises an interesting question: given the choice, is that the category in which we really want to have an advantage?