A recent study reveals that international students graduating from the University of Waterloo earn significantly higher salaries than their Canadian-born counterparts, both shortly after graduation and throughout their careers. This phenomenon sheds light on the evolving landscape of Canada’s labor market, the value of certain fields of study, and the success of immigration pathways for skilled professionals.
1. Key Findings of the Study
Higher Earnings Post-Graduation
Economists at the University of Waterloo conducted a comprehensive analysis using student records, immigration data from Immigration, Refugees, and Citizenship Canada, and income tax returns from the Canada Revenue Agency. The results were striking:
- One year after graduation (2017-2019 cohorts), international graduates earned an average of $57,500, compared to $42,000 earned by Canadian-born graduates—a 37% higher average.
- The gap in median earnings was even wider: $56,400 for international graduates versus $38,700 for Canadian-born graduates, a 46% difference.
Long-Term Salary Growth
The earnings advantage extended well beyond the initial years:
- After 13 years, international graduates who became permanent residents earned close to $120,000 annually, outpacing both Canadian-born graduates (averaging $100,000) and international graduates who did not obtain permanent residency (earning between $100,000 and $120,000).
2. Factors Contributing to the Earnings Gap
A. Concentration in High-Demand Fields
The University of Waterloo is renowned for its emphasis on technology and engineering, fields that consistently yield higher economic returns. A significant portion of its international students pursue degrees in these disciplines, leading to better-paying jobs in sectors such as software development, data science, and engineering.
B. Co-op Program Advantage
Waterloo’s extensive co-op program provides students with hands-on industry experience, enhancing their employability. This program has been instrumental in bridging the gap between academia and industry, offering students a competitive edge in the job market.
C. Motivation and Adaptability
International students often demonstrate a strong drive to succeed, given the financial and personal sacrifices associated with studying abroad. Many also strategically choose programs aligned with Canada’s labor market needs to maximize their return on investment.
3. Broader Implications of the Findings
A. Economic Benefits of International Education
International students contribute significantly to Canada’s economy, not just through tuition fees but also by filling critical skill gaps in the workforce. According to Immigration, Refugees, and Citizenship Canada (IRCC), more than 800,000 international students were enrolled in Canada in 2023, and their presence supports $22 billion in annual economic activity.
B. Success in Immigration Pathways
The study highlights that 70% of international students at Waterloo become permanent residents, compared to the national average of around 30%. This underscores the university’s role as a gateway for skilled immigrants who contribute to Canada’s long-term economic growth.
C. Alignment with National Trends
The findings align with a 2024 Statistics Canada report, which showed that immigrants arriving as children are more likely to pursue higher education and achieve wages equal to or surpassing their Canadian-born peers after the age of 25.
4. University of Waterloo: A Magnet for International Talent
A. Academic Reputation
Ranked #115 globally in the QS World University Rankings 2025, the University of Waterloo is among Canada’s top five universities. Its global reputation in technology and engineering attracts a diverse student body, enhancing its competitive edge.
B. Focus on Practical Learning
Waterloo’s co-op program stands out as a defining feature, offering students practical experience in their chosen fields. This approach not only strengthens their resumes but also helps them secure lucrative positions shortly after graduation.
5. Policy Implications and Recommendations
A. Support for International Students
Given their economic contributions, policies should focus on facilitating international students’ transition to permanent residency. Streamlined immigration pathways like the Post-Graduation Work Permit (PGWP) and Provincial Nominee Programs (PNPs) play a critical role in retaining top talent.
B. Encouraging Domestic Participation in High-Demand Fields
To bridge the earnings gap, Canadian-born students could benefit from greater encouragement and support in pursuing degrees in high-demand fields like technology and engineering. Expanding co-op opportunities across disciplines could also help enhance employability.
The University of Waterloo’s international graduates serve as a testament to the potential of skilled immigrants in Canada’s labor market. Their higher earnings reflect the value of strategic academic choices, practical experience, and the ability to adapt to evolving market needs. As Canada continues to rely on skilled immigrants to address workforce shortages, fostering an inclusive and supportive environment for international students remains a national priority.
The findings from this study not only highlight the economic benefits of international education but also emphasize the need for targeted policies to maximize the potential of both international and Canadian-born graduates in driving economic growth.
