1 1 Students Wage and Employment Expectations Andrew J.A Dyck Supervisor: Ehsan Latif Thompson Rivers University
2 2 Abstract Students wage and employment expectations are influential in their schooling decisions. To date, no research has been done on the expectations of Canadian students. The emphasis of this study is on the formation of student wage and employment expectations, as well as comparing the expectations of domestic and international students. The questionnaire was distributed to students at a small, primarily undergraduate Canadian university. More than 600 questionnaires were completed. The research found that females expected lower salaries, less wage gain, and held lower job prospect expectations than males. A student s GPA had a positive impact on his or her salary expectations as did belonging to the Faculty of Science. The data revealed that international students expected a harder time finding employment. The new data found on Thompson Rivers University students expectations will provide a good basis for further study on the rationality of students expectations, and students educational attainment expectations.
3 3 Introduction The expectations students hold when it comes to future wage and employment probability are important in their occupational choice and educational attainment. A central tenet of the human capital theory is that people choose the optimal type and level of schooling based on the market returns to education. It is important to know how students form expectations about wage and employment and what factors determine such expectations. Even though issues involving the formation of expectations are important and interesting, few studies have so far examined these issues (Brunello, Lucifora, & Winter-Ebmer, 2001; Dominitz & Manski, 1996;Lazorenko, 2007; Webbink & Hartog 2004; Wolter & Zbinden, 200; Wolter S., 2000). These studies use data from Europe and the United States and so far no study has been done using Canadian data. This is the first study using Canadian data, thus filling a gap in the literature. Dominitz & Manski (1996) found that the future earnings expectations of high school, university, male and female students were similar, ceteris paribus. There was however, significant variance in the expectations of students within these groups indicating that there is widespread uncertainty among students regarding their future earnings. These findings were made based on the results of a survey completed by 110 high school and college undergraduate students in the United States. Brunello et al. (2001) used a large sample of 6,829 students across ten European countries in order to broaden our knowledge of students wage expectations. Their study revealed that expectations regarding college wages and college wage gains were significantly related to field of study, gender, age, seniority in college, perceived student relative ability and family background. They also found that job prospects depend on the field of study and family background. Webbink and Hartog (2004) used data obtained from the research
4 4 project Continued Education completed in the Netherlands to compare students expected and realized incomes. Students were able to predict that compared to social studies, starting wages were 7% higher in economics, 11% higher in health and medical studies, and 9% higher in technical studies. Lazorenko (2007) confirmed that students with educated fathers had higher short and long term wage expectations. The study also found that academic performance and previous work experience had positive effects on wage and job prospect expectations. Finally, Lazorenko (2007), using data from economics student at Kyev University in Ukraine, discovered a very large gap in expected wages by gender. This gender gap occurs for salary expectations but not for job prospect expectations. Wolter (2000) found that students wage expectations were not significantly different than the current observed market wage structure. He found a high level of heterogeneity and uncertainty in the expectations of individual test participants. His data came from 137 high school, college, and university students in Switzerland. Wolter and Zbinden (2001), using data obtained from 1133 questionnaires completed by Swiss university students enrolled at the University Berne and the University of Zurich, concluded that the heterogeneity of wage expectations could be explained by differences in individual expectations, but not group differences. They found that women expected significantly lower wages and wage gains than men. These expectations were somewhat justified by actual observed wage structure. This study builds on the previous literature to confirm whether field of study, gender, and parental background have significant effects on the wage and employment expectations of Canadian students. Unlike other studies, this paper includes international students and compares the expectations of international and domestic students studying in Canada.
5 5 This paper has the following sections: section two of this paper deals with data and methodology, section three presents the results of the study, and section four offers the study s conclusions. Section 2: Data and Methodology The data for this study comes from 612 students of various faculties at Thompson Rivers University (TRU). TRU is a small primarily undergraduate institution located in Kamloops, British Columbia, Canada. The questionnaire is attached in the Appendix. After receiving approval from the Institutional Ethics Committee, the author collected data by distributing the questionnaire in over 25 classes between June 1 and July 15, This questionnaire was used to collect 559 student responses. An additional 53 survey responses were collected online using the survey hosting website Students were directed to this website by an advertisement posted on one of TRU s websites. The ad specified that the questionnaire was only for those who had not yet completed it in person. Of the 612 survey responses, some were missing important wage and/or employment expectation data. As a result, this study has different sample sizes for Salary and employment. There were 408 responses in the salary sample. Female respondents made up 46% of this sample, international students made up 48% of respondents, and 72% of respondents planned on working in Canada (Table 1.6). More descriptive statistics, including mean salary expectations and standard deviation can be found in table 1.6 at the end of the paper. There were 531 responses in the employment sample. 54% of respondents were male, 51% were Canadian, and 69% planned on working in Canada (Table 1.6).
6 6 Model Specification Salary Expectations: This study focuses on the impacts of demographics (age, gender, citizenship, and employment status), education (faculty, GPA, and credits), expected country of work and socioeconomic background (mother s education and father s education) on the salary expectations of university students. Salary expectations are divided into expected salary one year after graduation and highest expected salary (lifetime). Both models are the same: Expected Salary= β₀+β₁ Age + β₂ Credits + β₃ GPA + β₄ Business + β₅ Tourism + β₆ Science + β₇ Female + β₈ Full time + β₉ Part time + β₁₀ Father High school + β₁₁ Mother High school + β₁₂ Work in Canada + β₁₃ International + β₁₄ Father University + β₁₅ Father Trade certificate or College Diploma + β₁₆ Mother University + β₁₇ Mother Trade certificate or College Diploma +...(1) The dependent variable Expected Salary is a student s estimation of their annual pre-tax salary in today s dollars. As an individual grows older, he becomes more rational with respect to wage expectation. It is expected that young students overestimate their future salary and therefore students wage expectations will decrease with age. Credits are a proxy for years of university education. It is expected that the more education one receives and the closer one gets to graduation the less optimistic he or she will be regarding future wages. However, more credits mean more education. More education improves the prospect of a high paying job. So we cannot make any definitive conclusions regarding the effect of credits on expectations other than to say we predict it will have an effect. Cumulative GPA is a proxy of intelligence. GPA is a continuous variable. It is expected that students with a
7 7 high GPA will expect a higher salary than those with a low GPA. Faculty of study consists of: business, tourism, science and arts. Faculty of study will be a dummy variable with arts as the base category. It is expected that business students (including MBA and pre-mba) will have higher salary expectations compared to arts based on previous studies (Brunello, Lucifora and Winter-Ebmer 2001). Tourism students should expect a lower salary than arts because their jobs are often seasonal, have robust non-monetary benefits on the job such as adventure, thrill, and camaraderie, and because fewer tourism students go on to masters or phd programs compared to arts students. It is expected that being a science student will have a positive effect on salary expectations compared to arts due to the rigors of this type of education, the number of prerequisites required to enter into this program, and the fact that this faculty produces future doctors and nurses. This hypothesis is also supported by previous research (Brunello, Lucifora and Winter-Ebmer 2001). Previous studies show that on average females expect lower salaries and that in reality they receive lower compensation than men (Lazorenko 2007; Brunello, Lucifora and Winter- Ebmer 2001; Wolter and Zbinden 2001). Therefore we expect that females will have lower salary expectations. In this study female will be a dummy variable with male being the base category. The effect of employment is analyzed by asking if students are currently unemployed, working full-time, or working part-time. Employment will be a dummy variable with unemployed as the base category. It is expected that those working full-time will have more work experience and thus will expect higher wages than those who are unemployed. Those working part-time will also expect a higher wage but to a lesser extent.
8 8 International and domestic students have different academic, cultural and social backgrounds. These differences may affect salary expectations. Canadian will be the base category for the dummy variable international student. We also examine the effect of working in Canada (Canadaw) and working outside of Canada (ncanadaw). Here, working in Canada will be the base category for the dummy variable measuring which country students plan on working in. It is expected that those planning on working outside of Canada will most likely be international students returning to countries with higher purchasing power such as China or Saudi Arabia, and will thus expect lower salaries. Socio-economic background will likely play a large role in students expectations. Parental education is used as a proxy for parental income. Dummy variables will be used for both father s and mother s education. The base category will be those answering no formal degree or I don t know. Students were asked to state the level of education completed for each parent. The options will be no formal degree, high school, trade certificate or college diploma, university, and I don t know. We expect that students whose parents have higher levels of education (and thus income) will have higher salary expectations for themselves. Model Specification for Employment Expectations We focus on the impacts of demographics (age, gender, citizenship, and employment status), education (faculty, GPA, and credits), expected country of work and socio-economic background (mother s education and father s education) on the employment expectations of university students. Employment expectations were divided into employment probability one year after graduation and probability of receiving the job that pays their highest expected salary. Both models are the same. The dependent variable, employment probability, is ordinal in nature,
9 9 so the study will use an Ordered Probit method to estimate the model. The Ordered Probit model is useful to determine a student s expected employment probability. Yi*=xiβ + i... (2) Where yi* is the predicted employment prospects as a function of the independent variables in the model. The xi s are the independent variables, the βs are the estimated coefficients, and the i are the error terms. The observed ordinal employment probability is given by yi, which takes one of the values 1,2,3,4,5. The observed y is of the following forms: Y=1 Very Poor Y=2 Poor Y=3 Average Y=4 Good Y=5 Very Good Employment Probability= β₀+β₁ Age + β₂ Credits + β₃ GPA + β₄ Business + β₅ Tourism +β₆ Science + β₇ Female + β₈ Full time + β₉ Part time + β₁₀ Father High school + β₁₁ Mother High school + β₁₂ Work in Canada + β₁₃ International + β₁₄ Father University + β₁₅ Father Trade certificate or College Diploma + β₁₆ Mother University + β₁₇ Mother Trade certificate or College Diploma +...(3) The dependent variable employment probability is a student s estimation of their chances at receiving an appropriate job one year after graduation or of receiving a job that pays them their expected highest paying salary.
10 10 We expect that age will increase employment probability expectations as age provides an estimate of experience. Credits may have a positive effect on employment expectations because as a student accumulates more credits they accumulate more knowledge and expertise. Cumulative GPA is a continuous variable and should have a positive effect on employment probability as more talented students will be more highly sought after by firms. A Student s faculty of study will also affect their employment expectations. Faculties will be dummy variables with arts as the base category. Kamloops in particular and BC in general have booming tourism industries so it is expected that tourism students will have high expected employment probabilities. We expect that students from both business and science faculties will have higher expected employment probabilities than students from the faculty of arts. Studies have shown that gender plays a role in expected employment probability (Lazorenko, 2007) (Brunello, Lucifora, & Winter-Ebmer, 2001). It has been found that females expect lower employment probabilities and in reality have more difficulty finding suitable jobs. We expect to see the same results in our study. In this study female will be a dummy variable with male being the base category. It is expected that those working full-time will have more work experience and experience applying for jobs and will thus have higher expected employment probabilities. Those working part-time will also have higher employment probability expectations but to a lesser extent. Employment will be a dummy variable with unemployed as the base category. International and domestic students have different academic, cultural and social backgrounds. These differences may affect employment expectations. It is difficult to predict the
11 11 expectations of international students as we do not know if they possess accurate labour market data. It is expected that those planning on working outside of Canada will have higher expected employment probability as their foreign degree will aid them in finding a suitable job. Students planning on working in Canada will have a lower expected employment probability as they face stiff competition from many other university graduates. Canadian will be the base category for the dummy variable international student. Working in Canada will be the base category for the dummy variable which country do you plan on working. Socio-economic background will likely play a large role in students expectations. Parental education is used as a proxy for parental income and employment. We expect that students whose parents have higher levels of education (and thus income) will expect better job prospects for themselves. Dummy variables will be used for both father s and mother s education, with no formal degree/i don t know being the base category. Section 3: Results The results of the overall model of students expected salary one year after graduation revealed five variables that had a significance level of 10% (Table 1.1). Of the dummy variables, being a science student had the strongest positive effect on wage expectations one year after graduation. GPA was shown to be positively correlated to wage expectation one year after graduation. Being employed full-time also had a positive effect on these expectations. Interestingly, students whose mother was high school educated had a lower wage expectation than did those whose mother had no formal education/did not know. Those whose mother possessed a trade certificate or university diploma also had lower expectations compared to no
12 12 formal degree/did not know. Gender did not emerge as a significant variable when it came to our overall model for expected salary 1 year after graduation. Among females, being a science student had a positive effect on expectations when compared to an arts student, as did working full time when compared to being unemployed. Among males, working full time had a positive effect compared to being unemployed. This was the only significant variable affecting their expectations. A sample of international students showed that having full time employment and a father who was university educated had positive affects on wage expectations; while being a business student or having a mother who had a trade certificate or university diploma, or university degree had overwhelmingly negative effects on expectations. A sample of domestic students on the other hand, yielded no significant results for factors influencing short run salary expectations. For students planning on working in Canada, being a science student, employed full time and GPA had positive effects on expectations. Students whose mothers had a high school education or a trade certificate/college diploma had lower wage expectations than did students whose mother s had no formal degree. For those planning on working outside of Canada having a father who was university educated had a positive effect on expectations. This study found that in our Canadian sample, expected salaries one year after graduation are significantly related to field of study, GPA, current employment, and mother s education. Contrary to previous studies gender did not play a significant effect on expected salaries one year after graduation in either the overall model or any subgroups. International students one year salary expectations were not significantly different than domestic students one year salary expectations. We also found that parental education had a much larger effect on international
13 13 students than any other subgroup. In general, the effects of mother s education were negative, and the effects of father s (if any) were positive. In our overall model for highest lifetime salary, we identified two variables with significant effects (Table 1.2). GPA had a positive effect on expectations, and being female had a negative effect. There were six variables with significant effects on the highest lifetime salary expectation of females: being a business student and having a father with a university education had positive effects on expectations; while having a mother with trade certificate/college diploma, having a mother with a university education, being an international student, and working part time had negative impacts on expectations. We were unable to find any significant variables affecting the expectations of males. In our sample of domestic students, we found that being a business student had a positive effect on lifetime salary expectations as did GPA. Being female or having a mother with a trade certificate/college diploma had negative effects. The study only found one variable that had a significant effect on the lifetime salary expectations of international students. Being a business student had a negative effect on their expectations. For those students planning on working outside of Canada, age was negatively correlated to expectations. Being an international student had a significant negative effect on expectations. Credits and having a father with a high school diploma had positive effects. For those planning on working in Canada, the only significant variable is being female which had a negative effect. There is high variance in highest salary expectations and student performance and gender are the only significant variables we identified. Here our findings support previous work
14 14 claiming females expect lower lifetime salaries. Being a business student had a significant positive effect for females and domestic students; however it had a relatively stronger negative effect among international students. International students highest expected salaries were similar to domestic students. The only groups whose lifetime salary expectations were negatively affected by being an international student were females and those planning on working abroad. Expected wage gain was examined by calculating the difference between the log of first year salary and the log of highest expected salary. In our overall model for expected wage gain, we identified three significant variables: having a Father who is University educated, Credits, and being an International student (Table 1.3). In the sample of female students the study finds that having a university educated Father, being a business student and credits had positive impacts; while having a mother with a university degree, a mother with a trade certificate/college diploma or being an International student had negative effects. In the female subgroup, an increase in father s education caused an increase in does wage gain; while an increase in mother s education decreased wage gain. For domestic students, being a business student, having a high GPA, and more credits will lead to higher wage gain. Having a mother with a trade certificate/college diploma and being female were found to decrease wage gain expectations. After running an Ordered Probit Regression on data collected during the research we were able to identify variables that had significant effects on a student s expected probability of finding a suitable job one year after graduation. In the overall model we discovered that both business and science students expect a significantly higher probability of finding suitable employment than arts students. Those currently working full time also expected a higher probability of finding suitable employment when compared to those who are unemployed. An important finding is that international students expect a significantly lower probability of finding
15 15 suitable employment one year after graduation than domestic students do. Here it is notable that being female had no impact on expectations. In our female subgroup we found conclusive evidence suggesting that tourism, science, and business students all had higher employment expectations than arts students. Females who are international students expect lower job prospects than their domestic counterparts. In our male subgroup, we found that working fulltime led to significantly more positive expectations than being unemployed, while tourism students had lower expectations regarding their job prospects than arts students. Our sample of Canadian students yielded five variables with significant effects on students expectations regarding job prospects one year after graduation (Table 1.4). Science and business students had positive expectations compared to arts students. Age also had a positive effect on expectations. Among Canadian students, parental education had an impact on job prospects expectations. Students whose father s highest education was high school or whose mother s educational attainment was either high school, or a trade certificate/college diploma all had lower expectations when compared with parents with no formal degree/i don t know. In our sample of international students, currently working full-time had a positive effect on expectations while being a female had a negative effect. It is worth noting that among our group of Canadian students, being a female did not have a negative effect on job prospect expectations. In the sample of students who were planning on working in Canada, we discovered four variables that affected job prospects expectations. Science students stood out as having higher job prospect expectations than arts students. Students working full-time had higher job prospect expectations than those unemployed. Those students whose fathers only had a high school
16 16 diploma had lower expectations regarding finding suitable employment in Canada than did those students whose parents had no formal degree. International students had lower job prospect expectations than did domestic students planning on working in Canada. For those students planning on working outside of Canada currently working part-time was the only variable that had a significant effect and when compared to being unemployed its effect on expectations was negative. Being an international student had a significant negative effect on students one year employment expectations. Previous studies have shown that females have similar employment expectations as men, and we found this as well. One exception was found among international students. This study found that female international students have some of the most pessimistic views regarding their employment prospects one year after graduation. We were surprised that parental education didn t have significant impacts in the overall model. In our Canadian sample however, parental education did have a limited yet significant impact on expectations. We expected and found that field of study and current employment would affect employment expectations. When it comes to students expectations regarding their chances of receiving their highest paying job, or in other words the job they were thinking of when indicating their highest expected salary we found many variables with significant effects (Table 1.5). In the overall model we see that being a student enrolled in tourism, business, or science had a positive effect on expectations when compared to being enrolled in arts. GPA and planning on working outside of Canada also had positive effects on expected job prospects for highest paying job. Being an international student had a significant negative effect on expectations, as did having a
17 17 father with only a high school education when compared to a father with no formal degree/i don t know. In the female subgroup, tourism, business and science students all had higher expectations than arts students. Among females, having a mother with a university degree or a trade certificate/college diploma had positive effects compared to having a mother with no formal degree. Having a father with only high school education had a negative effect compared to having a father with no formal degree. Among females, international students had more pessimistic views on long term job prospects than domestic students. In our subgroup of males, GPA was the only variable that had a positive effect on expectations. In direct contrast to our female group, having a mother with a university degree, diploma or trade certificate had a negative effect. Being an international student had a negative effect on the long term employment expectations of male students. In our group of domestic students we found that students in tourism and business had higher expectations than arts students. Having a father with just a high school diploma had a negative effect on expectations when compared to students whose fathers had no formal degree. Among international students the only variable we found that affected expectations regarding the job prospects for their highest paying job was working part-time, this having a negative effect. In our sample of students planning on working in Canada, we were able to identify five variables that affected students expected probability of finding their highest paying jobs. Both tourism and business had positive effects on expectations when compared to arts. Working fulltime also had a positive effect on expectations. Having a father with just a high school diploma had a negative effect when compared to a father with no formal degree. Finally, international
18 18 students had significantly lower expectations when it came to the probability of finding their highest paying jobs here in Canada. Our sample of students planning on working outside of Canada provided us with four variables that had significant effects on expectations. Having a father who is university educated or high school educated had positive effects compared to having a father with no formal degree/i don t know as did GPA. Working part-time was the only variable that had a significant negative effect on these long term job prospect expectations. Consistent with previous research, gender did not play a role in long term employment prospects (Lazorenko, 2007). While only playing a limited role in our overall model, parental education did have significant impacts in all of our subgroups except international students. Mother s education had a positive effect on females expectations, while mother s education had a negative impact on male expectations. Interestingly age and credits had no effect in any of our subgroups. Obviously field of study affected students expectations, however field of study had no significant effects on the long term job expectations of international students. One final point we make about long term expectations is that international students expect lower employment prospects in our overall model, and every subgroup except those planning on working abroad. Section 4: Summary and Conclusion This study used responses to the same questionnaire by more than 612 university students at a small, primarily undergraduate university in Canada in order to examine students wage and employment expectations. Ordinary Least Squares Regressions and Ordered Probit Regressions were run on the data to identify sources of variance. We created subgroups based on gender, citizenship, and whether one planned on working in Canada or abroad. Some of our findings support previous work done on the topic, and some that have yet to be documented.
19 19 Our main findings can be summarized as follows: Expected salaries one year after graduation in our Canadian sample are significantly related to the field of study, GPA, current employment, and mother s education. This is similar to previous studies done by Brunello et al. (2001) and Lazorenko (2007). Contrary to previous studies done by Lazorenko (2007), Brunello et al. (2001), and Wolter & Zbinden (2001), gender did not play a significant effect on expected salaries one year after graduation in our overall model, or in any of our subgroups. Father s education tended to have positive effects on students expectations, while mother s education had the opposite effect. This is in line with Lazorenko s (2007) study which found that father s education had a positive effect on expectations. It also contradicts Brunello et al. (2001) who found that mother s education had a positive effect on salary expectations while also finding that father s education had no effect at all. There was no significant different between the one year salary expectations of international and domestic students. There were no subgroups in which being an international student had a significant effect on one year salary expectations. Predicting students highest salary expectations is difficult as student performance and gender are the only significant variables we identified. Here our findings support previous work claiming females expect lower lifetime salaries (Brunello, Lucifora, & Winter-Ebmer, 2001) (Lazorenko, 2007) (Wolter & Zbinden, 2001).There was no significant difference between the highest expected salaries of international and domestic students in our overall model. However, being an international student had a negative effect on the expectations of females, and those planning on working abroad. There are no significant variables in our male sub group; while in the female subgroup field of study, citizenship, current employment and parental education all had significant effects on highest lifetime salary expectations.
20 20 Wage gain was influenced by field of study, credits, father s education, and being an international student. Among our Canadian sample females expected less wage gain. This is consistent with previous research (Brunello, Lucifora, & Winter-Ebmer, 2001). We found that one year employment expectations were significantly related to field of study, current employment, and citizenship. These are similar to findings made by Lazorenko (2007) and Brunello et al. (2001). A students expected probability of achieving their highest paying job was significantly influenced by field of study, school performance, citizenship, and where one plans on working. Among females, mother s education had a positive effect on expectations, and among males mother s education had a negative effect. This study affirms Lazorenko s findings that gender does not influence employment expectations (Lazorenko, 2007). Being an international student was most likely to have a negative effect on employment expectations, especially among women. When it comes to employment probability for highest lifetime salary, we see that being a student enrolled in tourism, business, or science had a positive effect on expectations when compared to being enrolled in arts. GPA and planning on working outside of Canada also had positive effects on expected job prospects for highest paying job. Being an international student had a significant negative effect on expectations, as did having a father with only a high school education when compared to a father with no formal degree/i don t know. Among females, having a mother with a university degree or a trade certificate/college diploma had positive effects compared to having a mother with no formal degree. Having a father with only high school education had a negative effect compared to having a father with no formal degree. Among females, international students had more pessimistic views on long term job prospects than domestic students. In our subgroup of males, GPA was the only variable that had a positive
21 21 effect on expectations. In direct contrast to our female group, having a mother with a university degree, diploma or trade certificate had a negative effect. Being an international student had a negative effect on the long term employment expectations of male students. Being a member of the Faculty of science or business consistently produced more positive salary and employment expectations than did being a member of the Faculty of Arts. Significant parental effects on wage and employment expectations were seen more often in our subgroups of women and international students than in any overall models or subgroups. A broader study covering more universities would be the most obvious extension of the current research on the wage and employment expectations of Canadian students. Further study can be done to determine to what extent are Canadian students expectations rational. Another area of study is the educational attainment expectations of Canadian students. Both of these topics would provide useful information towards the human capital theory.
22 22 Table 1.1 Expected Salary 1 Year After Graduation Variable Overall Female Male Canadian ncanadian Canadaw ncanada Age.005(.007).027(.018) (.019) (.038) (.024) (.028) (.010) Credits.001(.002).002(.004).002(.004) -.001(.001) (.001) (.003) (.002).248***.376*** GPA.407(.336).096(.063).393(.293).044(.082) (.144) (.224) (.116) ** Business.005(.191).031(.380).112(.235).075(.230) (.125) (.236) (.256) Tourism.264(.224).289(.350).073(.172).358(.283) -.428(.300).409(.272) (.435).344***.567***.508** Science.114(.137).427(.269) -.046(.301) (.204) (.336) (.239) Female -.190(.121) Dropped Dropped.078(.113) (.173) (.129).237***.276***.142*** Full time.216(.195).233** (.115).255*** (.125) (.294) (.088) (.148) Part Time -.123(.142) (.092).001(.124) (.337) (.241) (.182) Fhighschool.291(.213).497(.394).006(.123).421(.319).011(.171).385(.270) Mhighschool -.321*** (.191) (.401) (.105) (.329) -.180(.138) -.462*** (.275) (.319).002 (.142).153 (.201) (.187).168 (.223) (.188) Canadaw.048(.091).130(.143).065(.100).031(.159).104(.096) Dropped Dropped ncanadian.044(.143).172(.345) Dropped Dropped.081(.181) (.095) (.204) funiversity.225(.188).435(.444).086(.113).226(.321)-.283***.384***.213(.237) (.160) (.231) (.205 ftradedip -.014(.249).031(.465).135(.155) (.118) (.389) (.326) ) M University -.190(.133) ** (.304) (.161) (.213) (.212) (.173) (.313) -.221*** *** -.347*** mtradedip (.134) (.269) (.128) (.246) (.178) (.205) (.231) Notes: Standard errors are shown in parentheses. Significance levels: *1%, **5%, ***10%
23 23 Table 1.2 Expected Highest Paying Salary Variable Overall Female Male Domestic Ncanadian Canadaw ncanadaw Age (.007).001(.008) (.013) (.007).019(.028).007(.009) -.022*** (.013) Credits.002(.001).000(.002).003(.002).001 (.002).002(.002) -.001(.001).007*(.003) GPA.129*** (.076).031(.107).148(.110) Business.042(.124).257** (.132) (.216).160*** (.097).293** (.125).102(.136).143(.090).087(.148) -.547*** (.306).042(.129).261(.392) Tourism.236(.214).299(.249).107(.393).159 (.185) -.272(.178).289(.256).458(.447) Science.265(.177).176(.142).164(.323).102 (.159) -.068(.463).316(.207).321(.394) Female -.310* (.106) Dropped Dropped -.319** (.131).233(.553) -.350*(.124) -.229(.219) Full time.156(.154).169(.213).107(.217).099 (.151) -.254(.217).107(.150).143(.418) Part Time.022(.126) -.264** (.120).311(.227) (.122).352(.279).060(.146) -.361(.275) Fhighschool.146(.137).181(.190).134(.195).198 (.145) -.022(.279).026(.140).539*** (.328) Mhighschool -.052(.119) -.170(.173) Work in Canada -.041(.128) -.147(.180) (.157) (.182) (.144).051(.203) -.113(.142) -.133(.253) (.203).017(.164) Dropped Dropped Ncanadian -.123(.160) funiversity.208(.135) -.289*** (.178).348*** (.199) ftradedip.009(.132).267(.186).031(.225) Dropped Dropped.018(.169) -.711*** (.367).073(.177).092 (.126).212(.268).181(.150).388(.317) (.201) (.130) -.062(.264) -.073(.158).190(.275) MUniversity -.022(.153) -.510* (.194).202(.219) (.156).010(.266) -.050(.177) -.252(.339) mtradedip.011(.144) -.371** (.186).282(.220) -.372* (.139).306(.298) -.120(.139).107(.374) Notes: Standard errors are shown in parentheses. Significance levels: *1%, **5%, ***10%
24 24 Table 1.3 Expected Wage Gain Variable Overall Female Male Canadian ncanadian Canadaw ncanadaw Age -.029(.045).007(.016) -.052(.081) -.066(.047).122*** (.075).029(.022) Credits.006** (.003).007*** (.004) -.154** (.067).006(.005).006*** (.004).004(.006).000(.003).016**(.007) GPA.222(.142).223(.186).149(.220).312**(.147).227(.282).141(.163).346(.351) Business.365(.283).677*** (.377) -.190(.418).512** (.240).054(1.158).385(.299).908(.873) Tourism.552(.415).778(.513).262(.656).037(.308) 1.028(1.394).753(.473) (1.034) Science.153(.415).412(.314) -.342(.724).051(.315).243(1.712).591*** (.343) (1.406) Female -.342(.227) dropped dropped -.512** (.238) -.129(.419) -.274(.273) -.529(.533) Full time -.124(.444) -.266(.518).084(.614).049(.368) (1.369) -.114(.443) (1.091) Part Time.293(.225) -.306(.249).805** (.386).095(.242) 1.118** (.490).234(.250).261(.553) Fhighschool.175(.421).167(.480).216(.683).173(.240).072(.967).037(.393).526(1.160 Mhighschool.298(.401) -.134(.333).477(.660).081(.251).798(.876) -.030(.451).373(.993) Canadaw -.044(.319).065(.436) -.281(.451).109(.525) -.283(.428) dropped dropped ncanadian -.612*** (.365) -.648*** (.385) -.573(.496) dropped dropped -.607(.406) (.740) funiversity.712*** (.421).957*** (.513).565(.633).334(.230).876(1.009).545(.441) (1.035) ftradedip.117(.401).596(.484) -.440(.659) -.221(.268).299(.969) -.288(.420).850(1.026) MUniversity.108(.454) ** (.465).693(.741) -.206(.319).841(1.025).200(.504) (1.033) mtradedip.168(.432) -.864*** (.485).929(.661) -.626*** (.326) Notes: Standard errors are shown in parentheses. Significance levels: *1%, **5%, ***10% 1.248(1.015) (.464).280(1.193)
25 25 Table 1.4 Probability of Finding Suitable Job 1-year After Graduation Variable Overall Female Male Canadian ncanadian Canadaw ncanadaw Age.017(.013).021(.017).016(.017).023***(.014) -.010(.027).015(.014).034(.034) Credits (.001) -.000(.002) -.002(.002) -.002(.002) -.002(.002) -.001(.001) -.002(.003) GPA.072(.088).140( (.125).042(.124).165(.134).076(.112).160(.157) Business.267*** (.142).383** (.194).121(.210).322***(.173) -.166(.284).201(.163).465(.367) Tourism.165(.229).742*(.271) -.573*** (.350).297(.321) -.356(.430).313(.270) -.186(.490) Science.472*(.162).709*(.224).227(.241).457*(.172) -.051(.370).410** (.175).772(.484) Female.044(.102) dropped dropped.178(.143) -.261*** (.158).070(.122) -.047(.201) Fulltime.376** (.170).249(.271).442*** (.242).311(.201).702**(.319).436** (.187).110(.397) Parttime.059(.130).051(.215).041(.186).094(.160) -.263(.237).145(.143) -.561*** (.324) MHighschool -.128(.160) -.245(.242) -.039(.220) -.215(.214) -.078(.259) -.162(.206) -.269(.279) highschool -.169(.160) -.275(.227) -.086(.248) -.351*** (.196).337(.286) -.406** (.188).524(.335) mudegree -.178(.173) -.013(.264) -.324(.236) mtradedip -.206(.169) -.069(.245) -.381(.240) -.361*** (.221).098(.297) -.173(.215) -.246(.327) -.377*** (.229).029(.272) -.290(.213).017(.302) funiversity -.010(.148) -.189(.214).162(.212) -.072(.201).163(.246) -.172(.177).281(.284) ftradedip -.086(.154) -.158(.211) -.045(.237) -.109(.191).151(.266) -.107(.186) -.281(.297) -.310*** ncanadian -.356** (.150) -.569** (.248) -.200(.203) dropped dropped (.169) -.316(.365) ncanadianw.151(.117).116(.193).181(.155) -.095(.313).308**(.138) dropped Dropped Notes: Standard errors are shown in parentheses. Significance levels: *1%, **5%, ***10%
26 26 Table 1.5 Probability of Finding My Highest Paying Job Variable Overall Female Male Canadian ncanadian Canadaw ncanadaw Age.007(.012).008(.014).005(.017).013(.013) -.017(.025).004(.012).011(.035) Credits -.002(.001) -.001(.002) -.003(.002) -.003(.002) -.000(.002) -.002(.002) -.000(.003) GPA.143*** (.089).042(.127).240*** (.127).100(.126).167(.128).135(.114).270*** (.162) Business.338*(.137).473*(.188).207(.207).326**(.165).214(.243).292** (.150).398(.393) Tourism.496**(.206).458*** (.244).478(.315).466**(.228).489(.409).486** (.199).539(.605).277*** Science.445**(.222).111(.248).296(.188) -.102(.292).256(.180).222(.423) (.162) Female -.059(.100) dropped Dropped -.071(.142) -.148(.143) -.005(.119) -.228(.185) Full Time.247(.163).318(.244).247(.225).237(.194).472(.313) Part time -.097(.125).068(.189) -.212(.186) -.014(.163) -.350*** (.209).307*** (.174) -.054(.138) -.043(.527) -.520*** (.291) Mhighschool.085(.158).373(.234) -.131(.215).133(.199) -.057(.258).142(.195) -.288(.288) highschool -.290*** (.165) -.484** (.226) -.180(.253) -.370*** (.200).017(.314) -.592* (.190).619*** (.356) mudegree -.075(.171).487**(.245) -.442*** (.233) -.049(.220) -.166(.282) -.074(.208) -.186(.349) mtradedip -.018(.167).414*** (.239) -.380*** (.223).004(.225) -.100(.257) -.101(.209).173(.291) funiversity.009(.155) -.258(.213).187(.228) -.210(.207).388(.262) -.230(.186).589** (.291) ftradedip -.107(.159) -.262(.223) -.040(.238) -.131(.196).133(.275) -.302(.189).267(.306) ncanadian -.467* (.138) -.445** (.219) ncanadianw.247** (.119).114(.197) -.445** (.190).333** (.154) dropped dropped -.417* (.148) -.428(.384).032(.311).380*(.145) dropped dropped Notes: Standard errors are shown in parentheses. Significance levels: *1%, **5%, ***10%
27 Table 1.6 Survey Demographics Sample Salary Employment Overall 408 (100%) 531 (100%) Female 188 (46%) 246 (46%) Male 220 (54%) 285 (54%) International 195 (48%) 258 (49%) Domestic 213 (52%) 272 (51%) Work Abroad 115 (28%) 164 (31%) Work Domestic 293 (72%) 367 (69%) 27
28 28 Appendix: Questionnaire Students Wage and Employment Expectations The decision to attend post-secondary schooling is based on the expected wage gains and increased employment probability stemming from holding a university degree. Any flaw in a student s expectations could result in the student making a poor decision in determining the optimal level of education to attain. Little is known regarding the expectations students hold regarding wages after university, or their chances of securing employment. This research asks: What are students wage and employment expectations at a small Canadian university, and are they realistic? This study will provide a better understanding of students wage and employment expectations, the factors that influence these expectations, and whether or not these expectations are realistic You have the right to refuse participation in this study, but if you choose to fill out the questionnaire it will be assumed that consent has been given; and you can withdraw at any time without consequence. The survey will take around 5 minutes to complete. I ask that at no time you write your name on the questionnaire or state any personal identifying material as to protect your anonymity. All answers given will be kept confidential. The results once compiled will be presented at the Undergraduate Research Conference and potentially published in a journal. These results will only be stated as a whole and not individually. If you have any concerns, comments, or questions regarding the research or the questionnaire please feel free to contact the researcher Andrew Dyck at Dr. Ehsan Latif at or Dr. Peter Tsigaris Chair of the Economics Department at telephone number Thank you for your time and participation, Andrew Dyck
29 29 1) Gender: Male Female 2) Age: 3) What is your citizenship: 4)In which country will you work: 5) How many University credits have you completed (one class is generally three)? 6) Which faculty/program do you belong to? Arts Science Nursing Education Trades Fine Arts Health Sciences Business MBA Tourism Pre-MBA Other 7) Are you currently working? Yes full-time Yes Part-time No Current hourly wage: 8) What level of education do you expect to attain? Diploma Bachelors Masters PHD Professional designation (which) 9) What is your GPA (4.33 scale)? 6) What level of schooling did your Father achieve (final degree reached)? No formal degree Apprenticeship/trades training High-school College diploma University degree Master s degree PHD Don t know 7) What level of schooling did your Mother achieve (final degree reached)? No formal degree Apprenticeship/trades training High-school University diploma University degree Master s degree PHD don t know 10) What yearly salary (before tax) do you expect to earn one year after finishing your degree? 12) What do you expect your highest yearly salary (before tax) will be during your career? 13) What do you think are your chances of getting an appropriate job within 1 year of graduation (paying salary indicated above)? Very Poor Poor Average Good Very Good Don t know 15) What is the likelihood of you getting that job you thought about when indicating your highest expected yearly salary? Very Poor Poor Average Good Very Good Don t know
30 30 References Brunello, G., Lucifora, C., & Winter-Ebmer, R. (2001). The Wage Expectations of European College Students. Institute for the Study of Labor (IZA), Discussion Paper No.299. Dominitz, J., & Manksi, C. F. (1996). Eliciting Student Expectations of the Returns to Schooling. The Journal of Human Resources 31: Lazorenko, I. (2007). Wage Expectations and Job Prospects of KYIV Economics Students. Ukraine: National University (unpublished masters thesis). Webbink, D., & Hartog, J. (2004). Can Students Predict Their Starting Salary? Yes! Netherlands. Economics of Education Review Volume 23(2): Wolter, S. C. (2000). Wage Expectations: A Comparison of Swiss and US Students. Kyklos 53: Wolter, S. C., & Zbinden, A. (2001). Rates of Return to Education: The View of Students in Switzerland. Institute for the Study of Labor (IZA Working paper No.371).