A recent Canadian study shows that undergraduate students have a marginal tendency to select higher-paying private-sector jobs in hopes of paying off their student debt quicker, with the assumption that non-profit and public sector careers pay less.
The study looked at responses from 8,383 students who are in their final year of studies from 126 universities and colleges across Canada. The students completed questions that looked at measures such as what type of organization they’d like to work at after graduation (i.e. small business, large company, non-profit, etc.); how much debt they would carry after graduating; work values they consider important when seeking employment (i.e. personal impact, social responsibility, etc), and so on.
Respondents were mostly female (67%), white (77%), and average 22 years of age. The majority of students majored in business (28%) and liberal arts (26%). The average debt they carried was about $15, 000 CAD.
Some of the findings of the study were:
- 58% of respondents are interested in private sector careers, while 35% are interested in public sector jobs, and 8% in non-profit
- Students that have a lower amount of debt ($14,300 CAD) have private-sector career interests, followed by students with interest in non-profit at $15,600 CAD and interest in the public sector at $18,300 CAD
- Students that had a higher PSM (public service motivation) preferred public and non-profit work over private-sector careers.
- Those who opted for the public sector and non-profit careers scored higher on measures like social responsibility and personal impact
- College students expect the public and non-profit sectors to pay less than the private sector
- Education debt may be related to a marginal tendency for students to select higher-paying private-sector careers
- Despite high levels of PSM, students facing rising debt levels may prioritize economic considerations over public service in initial career choice
To get further insight into this study, we interviewed Eddy Ng, Associate Professor and Smith Professor of Equity and Inclusion at Queens University.
“In the public sector there’s salary compression […] but then […] the public sector does offer certain benefits like job security, […] better pension plans, […] so you might not be paid upfront, but you get compensation later when you retire, so that makes the upfront compensation to be significantly lower compared to the private sector,” says Ng.
He goes on to say that even if students are predisposed to public service motivation (PSM), when they factor in measures like paying rent, groceries, paying off education debt in the future, they may actually change their minds and choose to go the private sector route.
So how does this play into effect during the COVID-19 pandemic, as employees are increasingly looking for more job security, better mental health support, and work from home options, and the likes?
Ng says, “government jobs are actually more flexible than people realize […] the government actually allows for more flexible arrangements than the private sector […] so during the pandemic a lot of civil servants actually worked from home […] whereas in a lot of private sector jobs, that option may not be as available.”
He adds that often times we don’t see the meaningful work the government offers because public service delivery is behind the scenes. However, when there’s something like the pandemic, these workers become more visible. Ng says the government has to do a better job of recruiting.
“If you come work for the government, it doesn’t have to be federal, it can be provincial […] and even local government and here are some of the meaningful things and here are some of the ways you can affect people’s lives.”
Ng says if the public sector has a hard time recruiting in attracting the best and the brightest from universities and colleges, then there is a problem down the road in terms of adequately serving Canadians to deliver a public service.
“[Take a] look at COVID, we want good civil servants to roll out vaccines, to implement mass vaccinations, to actually procure them.”
You can read the full study here.