One of capitalism’s greatest successes is convincing us that if we work hard enough, we can succeed financially. With enough hours put in – or if you’re Malcolm Gladwell, a minimum of 10,000 hours – anyone can become the next Steve Jobs, Ariana Grande or Warren Buffett.
Colleges and universities sell this same idea in their glossy brochures. Apply to this course at our campus and every coding aspirant from the most impoverished districts of India can become the next Google or Microsoft CEO.
It’s a rags-to-riches story we have been fed since birth. Now internalised, we ignore the reality, choosing to believe in this false tale of hope. But for the international student, and especially for their parents, who have invested their life savings in a costly education abroad, such sobering information is exactly what’s needed before deciding where and what to study.
— World Economic Forum (@wef) January 1, 2017
Both will have significant bearing on what happens next after earning a university degree, ie. work. Many international students choose a study destination (typically developed economies with favourites like the UK, US and Canada) with hopes of securing a job and later, permanent residence status. While this is a monumental decision, many rely on questionable sources of information that discuss what working in these countries post-graduation will be like.
On the other hand, there are many reliable sources of economic data available that can paint a truer picture of what post-study working opportunities will be like in a particular country. Not everyone who studies in the US can become the next Sundar Pichai, but they can get an idea of what the average job in a particular host country will be like.
Below we list four easily searchable economic indicators and how international students can interpret them to assist their research:
1. Unemployment rate
This refers to the percentage of unemployed persons in an economy against those who are employed. An unemployed person is described as someone who does not have a job but is actively seeking work. It is calculated as:
Unemployed Individuals/Total Labour Force × 100
This can easily be found on each country’s national statistical institute’s page, or simply by Googling [country name] + “unemployment rate”. The Organisation for Economic Co-operation and Development (OECD), the International Monetary Fund(IMF) and the World Bank also keep a record of national unemployment rates for a large number of countries.
A high unemployment rate, and one that has been consistently so, usually means there is a recession and the economy is in ill shape. This should ring warning bells in international students as this would severely dampen their chances of being hired there. A low unemployment rate typically means the economy is expanding, though beware if it is described as a ‘super low unemployment rate’, as this could be a sign that a recession may follow soon after.
2. Youth unemployment rate
While the first applies to the general population, youth unemployment rate is limited to those between the ages of 16 to 30, though specific ranges would differ from country to country. The United Nations fixes it as between 15 and 24, a range that has been criticised for being problematic.
As graduates typically fall into this age range, this rate is more useful for international students. Though youth unemployment rates are typically higher in most countries, it is still cause for concern if the country you are planning to work in has a particularly high rate. This could mean there is a growing mismatch between the education system and those required in the country’s workplace. When there is a shortage of available graduate jobs, companies would be most likely to hire local candidates, for whom they would not have to pay relocation or visa costs.
Working in a country with high youth unemployment has long-term implications for a person’s earnings. For example, A and B got the same junior position, but at ages 24 and 28 respectively. B would be climbing the career ladder at a disadvantage, both professionally and financially, compared to A. This would delay B’s ability to command a higher salary compared to A, thus delaying B’s ability to save, buy a house, etc.
The Brookings Institute notes that “a six-month bout of unemployment at age 22 would reduce wages by eight percent in the following year, and would reduce future earnings by about US$22,000 over the next decade”.
3. High-skilled employment rate
This generally refers to ‘professional’ or ‘managerial’ positions. They are found in corporate enterprises or governments, and include occupations such as senior government officials, financial managers, scientists, engineers, medical doctors, teachers and accountants. Though a skilled worker technically means a person with special skill, training, knowledge, and (usually acquired) ability in their work, this would include blue-collar and white-collar workers. However, economic indicators usually define high-skilled as a type of work done by the latter.
As the majority of university graduates aim for high-skilled work, it pays to know whether the economy is producing enough high-skilled jobs. But beyond telling us how many graduate jobs are available, it is also a key driver of economic growth. A high rate is, as the World Economic Forum describes and as seen in Luxembourg, Singapore and Switzerland, a positive sign that a country is “making the most of a country’s human capital and building a diversified pool of talent”.
4. Median salary
When it comes to salaries, it’s better to look for the median instead of the mean salary in a particular field. The median salary is the point where half of the people who work in that field make less than that and the other half makes more. Imagine the entire salary pool and cutting it in half – that’s your median.
It’s a better representation than the mean salary, which adds up all salaries and divides by the number of employees. This is susceptible to be skewed by those on the extreme ends on the spectrum – a few people earning significantly more than is normal can skew the results to look like it’s normal to make more – thus giving us a less accurate representation of how much people earn in particular fields.
Knowing the median salary lets international students make decisions such as whether to remain in the host country to work or return home. A low median salary in US dollars may be a lot when converted to Indian rupees, for example, but it may not be much when the American cost of living is factored in.