Labour market results vary significantly with the level of education as illustrated in the diagram below for Newfoundland. The downward slope of the points shows that those with greater levels of education enjoy better job prospects and a lower unemployment rate.

In particular, the position of those with university degrees stands in stark contrast to those with under nine years of education. While 80.3 percent of all persons with a degree were employed in 1995, only 15.5 percent of persons with less than nine years education were employed. As a result, for those participating in the labour force, the unemployment rate was only 7.2 percent for those holding degrees compared to 33.6 percent for those with the least amount of formal education. The two groups possessing some post-secondary education also experienced unemployment rates below the provincial average of 18.3 percent. This pattern of labour market performance, characterized by higher employment rates, and lower unemployment rates for those with higher formal education levels, has been in evidence for many years in both Newfoundland and the rest of Canada.

While there have been persistent disparities between Canada and Newfoundland in labour market indicators, the disparities are much less for those with a university degree. If the employment-population ratio is used as an indicator of economic disparity, then those with a university degree in Newfoundland are more likely to be employed than their mainland counterparts. The employment-population ratio for degree holders in 1995 was 80.3 percent in Newfoundland compared to 79.6 percent for Canada.

While the unemployment rate for Newfoundland degree holders was 7.2 percent compared with 4.9 percent for Canada, this is attributable to the fact that Newfoundland also had a higher labour market participation rate for university graduates.

The disparity across educational groupings has persisted over time in the Province but there has been a shift in the composition of the population as more individuals have obtained a post-secondary education or otherwise upgraded their skills.

In 1990, there were 99,000 persons (fifteen years of age and over) with eight years or less of schooling but by 1995 the number had dwindled to 91,000. (A large proportion of these individuals are in fact over the age of 65 and would not be in the workforce.) Over the same period the number of individuals with a post-secondary certificate or diploma increased by 21 percent to 120,000 while the number with a university degree surged by 44 percent to 36,000.

A greater share of employment is now held by those with higher education than at any previous time. The diagram below shows that 14.7 percent of those employed in 1995 hold a university degree compared to 10.7 percent just five years earlier. Both supply and demand forces are at work. There is a greater supply of well educated individuals in the labour market and there is also greater demand for their services.

This demand emanates from an increasingly knowledge-based economy that requires well educated individuals who are capable of developing, applying, and/or communicating knowledge. The emergence of the innovative technologies sector that has been discussed throughout The Economy 1996 is reflective of this trend.