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SMA3 Metric: Graduate Employment Earnings

Graduate employment earnings is another metric that is not found in most of the established PBF programs but is found in Florida’s PBF program in the form of median wages of bachelor’s graduates employed full-time. Like Florida, Ontario’s metric is described as the “median employment earnings of university graduates, two years after graduation” (MTCU, 2019, p. 24).

The MCU and the Council of Ontario Universities (COU) currently track graduate earnings through the OUGS (the same data source as graduate employment rate in a related field metric), but for SMA3 the graduate employment earnings metric’s data source will be Statistics Canada’s new Educational and Labour Market Longitudinal Platform (ELMLP).

The ELMLP gathers graduate income through the tax system as a means of measurement. It should improve response rates and verifiability, and graduates can now be tracked for longer. The ability to exclude graduates who are enrolled in school for a second degree is no longer available (Statistics Canada, 2020; Usher, 2019), however, because the ELMLP keeps only “the record with the highest Postsecondary Student Information System program type, e.g., graduate program level is retained over undergraduate level” (Statistics Canada, 2020, para. 30).

Florida’s PBF program tracks earnings

In Florida’s PBF program the data source is the National Wage Interchange. Florida is using the median wage, a switch from reports that the Florida Department of Education previously provided using the mean wage. In its FAQ document, the Florida Department of Education suggested that “mean wages are potentially skewed by outliers. As an example, the State University System’s median wage (of US$33,044) for 2010-11 baccalaureates is lower than the mean wage (of US$35,820)” (State University System of Florida, 2019, p. 8).

Florida also measures at one year after graduation (State University System of Florida, 2019) in comparison to the ELMLP’s two-year sampling point (Statistics Canada, 2020).

It’s the economy stupid, it’s the stupid economy

The inclusion of a graduate earnings metric could be interpreted as a pressure for institutions to remain relevant to the economy and to industry. The market-based approaches of new public management (NPM) hold that if universities are measured by students’ earnings in the job market then this will encourage institutions to ensure students are well prepared and curriculum is relevant to industry’s needs.

While there is not a lot of literature available for this specific metric, this is the third of the three metrics that promote a discriminatory admissions selection bias and can further promote a shift towards high-wage disciplines to promote growth (Graduate Employment Rate in a Related Field and Graduation Rate).

Theoretically, a university or college that is worried that it will not meet its growth targets may engage in a form of favouritism towards professional disciplines or others associated with high-wage jobs, prejudicing against graduates in disciplines that typically lead to low-wage, nonprofit, or volunteer jobs. Universities may also consider increasing recruitment of alumni from disciplines associated with low-wage jobs into second degrees to remove them from the pool of graduates sampled by returning them to active student status.

Student earnings are not a direct measure of curriculum relevance to industry. There are existing methods of curriculum review, such as regular internal/external departmental review, and professional accreditations. The Ontario Universities Council on Quality Assurance (2019) framework integrate these perspectives and are part of the curriculum review process.

SMA3 also includes an experiential learning metric which has a much clearer link between curriculum and industry relevance.

Measuring the economy, not the institution

If the assumption is that industry is more responsive to the economy than the PSE system, and targets are set based on three years of institutional historic data, this metric is more likely to measure changes in the salaries of university graduates relevant to industry’s response to the status of the economy, not a university’s response to it.

Implementation of the graduate employment earnings metric

09. Graduate employment earnings

The graduate employment earnings metric does not come into effect until year two, the average weighting across all four years of its activation in SMA3 is 6% with most institutions choosing to weigh it at 5%. The University of Waterloo weighs this metric the highest, at 15% in the 2021–22 and dropping to 10% in the subsequent years. The University of Waterloo’s top three metrics overall are all three metrics that represent measures of ultimate positive student outcomes. Université de Hearst does not participate in this metric.

No historical data are provided in the SMA3 historical data table for this metric in all 21 University SMA documents. Perhaps historical data are absent because this metric was not part of SMA2 or because this information was collected in the OUGS but SMA3 will use the new ELMLP, and the metric was not active in the first year.

Universities know this metric measures macro-economic factors, not their performance

The concern that this metric will measure regional or macro-economic trends was expressed in some institutional metric narratives. Brock University noted that “due to the unpredictability of broader economic factors that can influence the labour market, we have decided to take a cautious approach to this metric and have weighted it at 5%” (Brock University & MCU, 2020, p. 11).

Lakehead University simply noted its graduates’ earnings are consistent with broader macroeconomic trends. York University’s narrative states that “employment earnings are dependent on a variety of economic factors, as well as individual choices and definitions of career success” (MCU & York University, 2020, para. 7).

McMaster University and the University of Guelph’s statements appear to offer the most dissent from this metric. McMaster’s statement is more balanced: “Although we support strong outcomes in this metric, our weighting for this metric is cautiously low, given the reliance on matching multiple source files and variable economic market factors outside our control” (McMaster University & MCU, 2020, p. 13). The University of Guelph stated

While we are proud of the employment earnings of our graduates and will continue to place positive outcomes as a priority, we recognize that economic conditions are outside of our control and are a key determinant of these earnings. The weighting chosen reflects this inherent risk in this metric, and as such, U of G will allocate 5 percent of our funding to this metric throughout SMA3.

(MCU & University of Guelph, 2020, para. 50)

There is evidence to suggest that the metric is either redundant to other measures of positive student outcomes—or worse, does not measure anything about the institutions. Some institutions have gone so far as to include the institutional narratives in their summary.

The weighting system combined with institutional narratives are both an opportunity for institutions to dissent from metrics that they feel are flawed or do not favour, but it is also an opportunity for the government to contain objections within the system and prevent confrontation that may yield to change that the government is not prepared to consider.

Brock University, and Ontario Ministry of Colleges and Universities. “2020-2025 Strategic Mandate Agreement: Brock University [PDF],” 2020.

Council of Ontario Universities. “Quality Assurance Framework.” Ontario Universities Council on Quality Assurance, 2019.

Government of Canada, Statistics Canada. “Labour Market Outcomes for College and University Graduates, 2010 to 2016,” November 5, 2020.

McMaster University, and Ontario Ministry of Colleges and Universities. “2020-2025 Strategic Mandate Agreement: McMaster University [PDF],” 2020.

Ontario Ministry of Colleges and Universities, and York University. “2020-2025 Strategic Mandate Agreement:  York University.”, September 14, 2020.

Ontario Ministry of Training, Colleges and Universities. “Ontario’s Postsecondary Education System Performance/Outcomes Based Funding – Technical Manual.” Ontario Ministry of Training, Colleges and Universities, September 2019.

State University System of Florida. “Board of Governors’ Performance Funding Model (10 Metrics)  Questions and Answers,” June 2019.

Usher, Alex. “Performance-Based Funding 101: The Indicators.” HESA (blog), April 23, 2019.