The Education Premium in Canada and the United States

It is well known that in the United States the education premium--the ratio of the earnings of university graduates to the earnings of high school graduates--has risen sharply in the last twenty years. Some Canadian economists and policy makers presume the same fact holds in Canada. Since so much of modern growth theory and micro and macroecomomic policy turns on the education premium, it is important for social scientists and policy makers to know what has actually happened to the education premium. This paper argues that on the basis of available evidence over the last twenty years the premium has been constant or has fallen in Canada.