The impact of academic performance on post-graduation earnings

Abstract

This research examines performance effects, or the dispersion in post-graduation earnings relative to the distribution of average course grades, for a variety of postsecondary academic performance measures. The primary research question was intended to identify if there is a significant additional earnings premium associated with higher course grade performance in specific sets of courses over and above the return to a variety of contextual factors that have been known to yield individual differences in post-graduation earnings. Knowledge of dispersion in the economic return to academic performance for specific sets of courses in the presence of individual, credential, and labour market characteristics answers a number of clearly defined questions on the relationship between academic performance and post-graduation earnings and raises a number of interesting questions in relation to the role of academic performance in the rising return to education, shifting return to skills, and evolving wage structure. -- The analysis was conducted on a dataset constructed by combining individual-level employment and earnings data obtained from a provincial follow up survey of university graduates from the 1999-2000 academic year with individual-level academic and demographic data acquired from official university records. The dataset was extended by incorporating occupation- and degree-level labour market data from the week referenced by the earnings data, as reported in Job Futures compiled by the Department of Human Resources Development Canada. -- This research confirms the economic return to post-graduation earnings of targeted efforts to improve post-secondary academic performance, but suggests that the return is sensitive to specific groups, performance measures, and contextual effects. The research finds that, on average, even after taking into consideration the high premiums associated with individual, credential, and labour market characteristics, the impact of post-secondary academic performance on post-graduation earnings over a broad range of performance outcomes and lifetime of earnings can be substantial. The findings provide valuable policy and career planning information for provincial, national, and international education policymakers as well as education administrators, education practitioners, and individuals interested in pursuing a post-secondary education.