85
(employment rate and average employment income). To estimate the effect of education in this
context, the report compares Scenario 7 to Base Scenario 1. In Scenario 7, only education
improves, whereas none of the variables improve in Base Scenario 1. The average annual growth
rate of output is 0.032 percentage points higher in Scenario 7, and productivity growth is higher
by 0.006 percentage points on average each year. The absolute value of Canadian output is
higher by $8.3 billion over Base Scenario 1 in 2017, and labour productivity is also increased by
$92 per worker.
Table 24a: Potential Cumulative Contribution of Increases in Aboriginal Educational Attainment and
Labour Market Outcomes Over the 2001-2017 Period
|
Half the 2001 Educational Gap |
The Complete 2001 Educational | |
|
Contribution of Aboriginal Assuming |
126.3 |
161.0 |
|
Lower-Bound Contribution of Increases |
31.2 |
62.3 |
|
Upper-Bound Contribution of Increases in |
36.5 |
71.1 |
Source: Appendix Table 55 and 56
iii. Cumulated Effect Over Time
The additional GDP growth in Scenario 10 over Base Scenario 1 may seem small at only
0.081 percentage points each year. However, when considering billion of dollars, a small
increase in GDP growth has a large effect on the economy. Chart 18 illustrates the trend in the
difference between GDP under Scenarios 1 and 10. It is important to note that the chart
represents only one of the multitude of possible paths between the level of GDP in 2001 and that
reached in 2017. 33 In 2001, the GDP is the same in both scenarios, but in 2017, the difference
grows to $21.5 billion. Over the 16 years, the aggregate additional GDP to the Canadian
economy would be a staggering $161 billion (Appendix Table 55).34 Of the $161 billion, $71.1
33 Chart 18 assumes that the growth rate remains constant over the period. Of course, the path between the level of
GDP in 2001 and that in 2017 can take various other forms. Specifically, if a large number of currently employed
Aboriginal Canadians drop out of the labour force in order to return to school, this might results in more muted
growth at the beginning of the period and stronger growth towards the end. In turn, the shape of the path between the
2001 and the 2017 GDP level can significantly affect the estimate of cumulated benefits, and as such that estimate
must be interpreted with care. It is meant to be illustrative of the magnitude of potential benefits rather than a
definite and robust estimate of the cumulated benefits over the 2001-2017 period.
34 This cumulated additional GDP over the 16 years is determined by two effects. First, there is a level effect. The
increased growth rate in the first year induces an increase in the level of the GDP that is permanent over the whole
period. This is not a one-time gain: it is realized year after year. In other words, even if the growth rate increase was
only present in the first year, the level of the GDP would have been higher than the status quo in each of the
subsequent years. However, the effect of the growth rate is higher every year, and thus there is a second effect,