A more educated Aboriginal population would produce bonus for Canadian economy



    OTTAWA, Nov. 26 /CNW Telbec/ - If Aboriginal youth graduated from high
school and university in numbers comparable to other Canadian youth, the
additional value for Canada's economy could be counted in the tens of billions
of dollars.
    At the same time, more graduates would mean a larger labour force and
improved productivity.
    These are some of the conclusions of a study released today by the Centre
for the Study of Living Standards, based in Ottawa.
    In 2001, 52.2% of Aboriginal Canadians 15 and over were high school
graduates, compared to nearly 70% of non-Aboriginal Canadians.
    If Aboriginal Canadians close that gap, they and the communities where
they live would greatly benefit.
    But also, because high school graduates have an easier time finding
employment, command higher salaries, and are more productive than
non-graduates, Canada as a whole would benefit -- to the tune of an additional
$31 billion ($2001) in GDP over the period 2001-2017 if half the educational
gap were closed. If the entire educational gap were closed by 2017, the gain
would be an additional $62 billion ($2001). In 2017 alone, Canada's GDP would
be $4.2 billion ($2001) or $8.3 billion ($2001) higher respectively.
    The report analyses the relationship between educational attainment and
economic indicators such as labour force participation, employment,
productivity, and output growth.
    "It is not news that Aboriginal Canadians fall behind other Canadians in
terms of rates of completing high school and university," explains Dr. Andrew
Sharpe, Executive Director of the Centre.
    "What is new is this is the first time that the economic cost - or to put
it differently - the potential contribution - has been calculated.
    The significance of even a small improvement in educational attainment
rates is considerable," adds Dr. Sharpe.
    Developing specific policies to raise the educational attainment of the
Aboriginal population is beyond the scope of the study. However, it is obvious
that investments in education pay off. "Education is one of the most effective
tools a society has to assist the disadvantaged, and in addition it fosters
economic growth," Dr. Sharpe says.
    Thus investing in Aboriginal young people is one of the rare public
policies with no equity-efficiency trade off.

    Highlights of the report:

    - In the best case scenario, three gaps between Aboriginal and
non-Aboriginal Canadians would be eliminated by 2017: the gaps in educational
attainment, the employment rate, and employment income. According to this
scenario, the potential contribution of Aboriginal Canadians to Canada's GDP
would increase up to $160 billion ($2001) over the period 2001-2017. That
would represent an increase of $21.5 billion ($2001) in 2017 alone.

    - Lower rates of completing high school and university among Aboriginal
Canadians are linked to lower participation in the labour force. In 2001, if
Aboriginal Canadians had had the same education profile as non-Aboriginal
Canadians, their participation rate would have reached 67.7% instead of the
61.4% that was observed. The participation rate for non-Aboriginal Canadians
was 66.6% in 2001.

    - With better educational completion rates, Aboriginal Canadians would
account for 7.39% of labour force growth over the period 2001-2017. The report
estimates that Aboriginal Canadians will account for nearly 30% of the annual
natural population increase in Canada over the 2001-2017 period (natural
population increase is defined as births minus deaths).

    - The education gap between Aboriginal Canadians and other Canadians is
most significant at the university level. The proportion of Aboriginal
Canadians 15 and over with degrees increased over the 1996-2001 period from
7.8% to 8.9%. Over the same period, the proportion of non-Aboriginal Canadians
with degrees increased from 20.0% to 21.8%. While more Aboriginal Canadians
were completing university, the gap between the two groups was actually
widening.

    - The employment income gap between Aboriginal and non-Aboriginal
Canadians is due, in part, to lack of employment opportunities - not lack of
desire to participate in the labour market.

    - In the best case scenario, the potential contribution of Aboriginal
Canadians to the growth rate of labour productivity would increase up to
0.037 percentage point per year. Elimination of the gap in educational
attainment would contribute up to 0.016 percentage point per year in the
growth rate of labour productivity.

    - The report discusses the links between increased educational attainment
and better health, higher quality of life, and lower crime rates. It also
stresses the positive effect on government balances of a better educated
Aboriginal population. For example, expenditures on correctional facilities
and welfare would fall while revenues from Aboriginal employment income would
increase.

    The Centre for the Study of Living Standards is a non-profit, national,
independent organization that seeks to contribute to a better understanding of
trends in and determinants of productivity, living standards and economic and
social well-being through research.

    The Executive Summary and the complete report are posted at www.csls.ca




For further information:

For further information: To arrange an interview with the author,
contact Andrew Sharpe, (613) 233-8891, (andrew.sharpe@csls.ca); Martha Plaine,
(613) 728-4754, (mlplaine@yahoo.ca)

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CENTRE FOR THE STUDY OF LIVING STANDARDS

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