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The Puzzling Effects of Delaying Schooling on Canadian Wages

We compare the returns on education for graduates of postsecondary institutions who delayed their tertiary education for some time and those who proceeded with no delays. Using a unique survey that collects information on a representative cohort of graduates, we are able to estimate the effects of delaying school among successful graduates abstracting from specific macroeconomic conditions at the time of graduation. We show that graduates who delayed their education enjoy a premium relative to graduates who completed their education with no interruptions even after considering other factors such as experience or labour market connections. These estimates are robust to the possibility of selection in the decision to delay school. The results unveil a puzzle about the returns on education that calls for further research to investigate the effect of delay on earnings.