The evidence is overwhelming that the more education an individual has, the higher his or her income is likely to be — and the lower the odds of being unemployed, says a report issued by Toronto-Dominion Bank’s economics department in Toronto.
Furthermore, even with the big increase in the costs, the average annual return from investing in a post-secondary education is 10% for an undergraduate degree and even higher for college diplomas.
In 2010, 77% of those who had completed a post-secondary education were working, vs 67.5% of those who had finished high school and 40% of those who had not.
Those who had completed university had an average after-tax income of about $35,200 in 2005, the last year for which this data is available. This compares with $27,700 for those with a non-university certificate or diploma, $19,700 for those who had finished high school and $15,500 for those with none of the above.
The TD report provides projections about the cost of a four-year university undergraduate degree 18 years from now. (See accompanying chart.) For a student living at home, the cost in today’s dollars rises to $17,200 a year from about $13,800. For a student living away from home, the cost increases to $23,500 from around $21,000.
The reason the increase in the cost is greater for students living at home is that most of the costs are for tuition, books, fees and related expenses, which are expected to keep increasing faster than inflation. For students living away from home, the rise is muted by moderate increases in living expenses.