Higher Wages Luring Canadian Graduates to U.S., New Study Finds

October 27, 2008 - News Release

Higher earnings are enticing some of Canada's brightest university graduates to start their careers in the United States, with some bringing in up to 50 per cent more than their counterparts who stayed in Canada, according to new research by a University of Guelph sociologist.

Prof. David Walters, who worked with David Zarifa of Statistics Canada, found the difference in earnings between Canada and the United States was most pronounced among graduates with degrees related to computer science and engineering.

"Given such a large earnings gap, the recruitment strategies of some U.S. organizations and the boom in the information technology sector, it's not surprising that these degree-holders are leaving Canada in the greatest numbers," said Walters.

Published in the current issue of Canadian Public Policy, this study is the first to compare the early economic returns of new graduates who stayed in Canada with those of new graduates who left to work in the United States.

As part of the study, the researchers examined the first two years of employment of students who graduated from a Canadian university in 2000. They used data from Stats Canada's National Graduates Survey.

Overall, Canadian graduates who moved to the United States reported earning about 24 per cent more than their counterparts who stayed in Canada. The boost in salary was even higher for graduates with degrees related to engineering and computer science, who reported earning nearly 50 per cent more by relocating south of the border.

"These findings offer critical information for policy-makers who may seek to target specific groups of highly compensated leavers, since these individuals may have a higher propensity to leave Canada," said Walters.

Although the total number of graduates lured to the States was small — only about 400 made the move, compared with 6,000 who remained in Canada — the researchers found that most of those who migrated south are heavily concentrated in fields that are vital to the economy.

"They are physicians, nurses, engineers, professors, computer scientists and entrepreneurs, and those few fields are important for Canada's productivity in a global knowledge economy," said Walters.

Even more worrisome is that those who stayed in Canada were less likely to have obtained a scholarship, suggesting that those who went to the States may be more talented than those who remained, he added.

"Canada may be losing some of its brighter minds in the move."

To combat the loss, policy-makers should consider targeting new graduates who are more heavily rewarded in the U.S. labour market, such as engineers and computer scientists, and offer them comparable wages, benefits and tax structures, said Walters.

Canadian IT companies, in particular, need to start following what some U.S. organizations are doing and actively recruit students and inform them of their employment opportunities before graduation, he said.

"In this new age of technological innovation and knowledge-intensive labour, governments around the world have been pressured to tighten their grip on highly skilled workers. The Canadian economy certainly needs these individuals to stay competitive in a global knowledge economy."

David Walters
Department of Sociology and Anthropology
519-824-4120, Ext. 52198

For media questions, contact Communications and Public Affairs: Lori Bona Hunt, 519-824-4120, Ext. 53338/l.hunt@exec.uoguelph.ca, or Deirdre Healey, Ext. 56982/d.healey@exec.uoguelph.ca.

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