5, February, 2025

Are Canadians Smart enough?

Smart enough for what, you may ask.  Canada is a small open economy in  a very competitive world. The quality of the labour force – education and skill levels – is an important contributor  to international competitiveness. So we can re-frame the question: does Canada’s labour force have the level of skills and knowledge necessary to compete successfully internationally?

The first topic that comes to mind is IQ. However international comparisons of IQ is a controversial field that has been criticized as being unscientific so we will not deal with it.

There are three international comparisons with reasonably reliable methodology :

  • Education levels
  • PISA test (Program of International Student Assessment) that tests 15 year olds about literacy and numeracy, every three years, from the OECD. It aims to test their ability to use their reading, mathematics and science knowledge and skills to meet real-life challenges.
  • PIAAC (Programme for International Assessment for Adult Competencies) also from the OECD.  It has been done twice, first in  2012 then in 2023. It aims to answer the question: Do Adults Have the Skills They Need to Thrive in a Changing World?

Education levels

According to Statistics Canada, Canada has the largest share of college or university graduates in the G7 among people aged 25-64.

PISA results.

The latest PISA results are shown in the table below for the three areas of mathematics, science and reading. It is noteworthy that Canada ranks higher than its major trading partner the US in each ranking. While Canada ranks #8 or #9 in each area, the US ranks #34 (mathematics), #16 (science) and #9 (reading). However, Canada’s scores have declined since well before COVID. The mathematics rank declined from #6 in 2006 to #9 in 2022, the reading rank declined from #2 in 2000 to #8 in 2022 and the science rank declined from #3 in 2006 to #8 in 2022.

There is some variation across Canada. The graphic below shows the mathematics scores by province.

The PISA scores need to be taken with a large grain of salt. The Canadian data was flagged “One or more PISA sampling standards were not met.” Some countries are reported to put forward only their best schools, and it measures a very narrow range of skills, and its statistical reliability is uncertain.

Nevertheless, the fact that absolute marks declined by around 5% over the last 20 years is not good news.

PIAAC results.

This is based on a survey of almost 12,000 adults aged 16-65 conducted by Statistics Canada face to face in the person’s home, so from a methodology point of view is much more robust than the PISA results. It is part of a large international study including thirty-one countries, run by the OECD. The skills are rated on a five-point scale with five being best. It addresses performance in literacy, numeracy and adaptive problem solving. The graphic below summarizes the Canadian results compared with selected countries. Canada’s score is 271, 271 and 259 the literacy, numeracy and adaptive problem solving.

The results from the 2023 surveys show Canada at just above the OECD average. There are interesting findings from the survey:

  • Higher education qualifications do not necessarily lead to higher skills proficiency.
  • Higher numeracy scores lead to better health, earnings, life satisfaction, trust, and volunteer activities.
  • Significant segments of the Canadian population score at level 1 or below on a five-point scale- 18% in literacy, 19% in numeracy, and 22% for adaptive problem solving.
  • However, Canada fares much better than the US, where much larger segments of the population score at level 1 or below: 28% in literacy, 34% in numeracy and 32% in adaptive problem solving.
  • Scores for literacy, numeracy and adaptive problem-solving peak in the 25-34 age group and decline slowly for older age groups.
  • Labour force participation is much higher among those with level 4 or above skills (94%) compared with this with level 1 or below skills (67%).

Conclusion

Of the three data sources used, the PIAAC results are the most robust and best indicative of real-world situations. By these measures Canada ranks just above the OECD average, well behind countries such as Finland, Japan, Sweden, Norway, and the Netherlands. Canada performs better than the US on all three measures. This is not a particularly reassuring result, particularly as PISA scores (which may be an early indicator of future PIAAC scores) have been declining for almost two decades.

A fifth of the Canadian population has skills at level 1 or below, which limits their employability. Only two thirds of this group are in the labour force.

The high level of people with college or university credentials is good but its impact may be limited due to the finding from the PIAAC study that higher education qualifications do not necessarily lead to higher skills proficiency.

A focus on population skill levels should be a much more important part of the growth and productivity agenda.

 

Peter Josty