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i. Total Effect
Under Scenario 3, estimated total GDP is $1,696 billion ($2001) in 2017, increasing at an
average of 2.70 per cent per year over the period. Labour productivity is $91,062, with an
average annual growth rate of 1.33 per cent (Table 23). The effect of a partial catch-up in
educational attainment is, in this case, a 0.016 percentage point addition to annual output growth,
a 0.012 percentage point addition to annual employment growth and a 0.003 percentage point
addition to labour productivity growth (Table 23a). In 2017, the level of GDP would be
increased by more than $4 billion (Appendix Table 55). These estimates are obtained by
comparing Scenario 3 to Base Scenario 1.
Under Scenario 6, the estimated Canadian GDP is estimated at $1,709 billion ($2001) in
2017, $16.9 billion over the level of Base Scenario 1. It is also increasing at an average 2.75 per
cent per year. The labour productivity, for its part, is found to be $91,985 per worker, $429 over
the Base Scenario 1, with an average annual increase over the period of 1.36 per cent. The
average annual growth of GDP under Scenario 6 is 0.064 percentage point higher than that of the
Base Scenario 1. This represents the aggregate effect of all three sources of improvement.
Employment increases 0.033 percentage point faster under Scenario 6 than under Base Scenario
1, with the remaining growth translating into a 0.030 percentage points increase in average
annual labour productivity growth (Table 23a). GDP in 2017 would be $16.9 billion larger under
Scenario 6 than under Base Scenario 1 (Appendix Table 55).
ii. Effect of Increased Educational Attainment
More relevant to this report is the effect of education alone, and how much of the
improvement can directly be attributed to it. It is possible to estimate this single effect by
comparing Scenario 6 to Base Scenario 2 because both scenarios differ only on their assumption
about educational attainment. Output growth under Scenario 6 is 0.019 percentage points higher
annually than in Base Scenario 2. This increase in average annual GDP growth rate is divided
almost equally between employment and labour productivity growth, with the former increasing
0.010 per cent faster each year and the latter increasing 0.008 per cent faster each year compared
to Base Scenario 2. In absolute terms, labour productivity per worker in 2017 under Scenario 6 is
$113 higher than in Base Scenario 2 and total Canadian output in 2017 is higher by $4.9 billion.
The effect of education on output and productivity is smaller if no improvement in either
employment rates or average employment income in a given educational attainment category
occurred. In fact, we have already observed this when we compared Scenario 3 to Base Scenario
1. This comparison estimated that GDP would grow at a rate 0.016 percentage points higher per
year, employment at a rate 0.012 percentage point higher per year and labour productivity at a
rate 0.003 percentage points higher per year. Scenario 3 also projects that productivity will be
$46 higher per worker than in the Base Scenario 1 and output higher by $4,2 billion. These
estimates are slightly lower than those obtained when comparing Scenario 6 to Base Scenario 2.
Yet, in both cases (comparing scenarios 3 and 1 and scenarios 6 and 2), we are comparing
scenarios in which only the level of educational attainment was changed. The difference between