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Australia puts high price on HE premium

Wonkhe's Julie Hare gives her take on OECD's 2018 report on education in Australia - and it's not all a bed of roses.
This article is more than 5 years old

Julie is Wonkhe's Associate Editor in Australia.

Another year, another Education at a Glance (EAG) – that brick-like tome on all things education.

For Australia, a country tied up in policy paralysis, it’s not a bad report card, all things considered. Seventh in the world in terms of tertiary attainment (which include HE and VET), one of the highest levels of graduate employment, generous graduate premiums and healthy enrolment rates among mature age students. It’s a picture of a functional, well-organised and efficient post-secondary system – one that justifies Australia being placed tenth on the Universitas21 ranking of overall systems for several years in a row.

Perennial brawl

That said, it’s not all a bed of roses. Take the perennial brawl over funding. Each May as the government of the day takes efficiency dividends (aka funding cuts), the sector screams blue murder and points to the OECD data. And rightly so. To quote the report: “At the tertiary level, private funding before public transfers (ie, repayment of student loans) represents 37% of all expenditure, a share only exceeded by the UK (44%) and the US (62%). After public transfers, private expenditure accounts for 62% the expenditure on tertiary institutions while the OECD average is 31%. Together with the UK and New Zealand, Australia has one of the highest public to private transfers at this level of education.” In other words, low levels of government funding, high levels of private investment.

Tuition fees in Australia are high compared to other OECD nations, but it’s not local students who are keeping HE institutions afloat — it’s international students, as EAG points out. Get this: Australia has 26 international students for every domestic student studying abroad. Australia has the third highest number of international enrolments behind the US and UK – half a million overseas students in a country with a population of just 24 million. They also pay much higher tuition fees, often triple the going rate charged to locals.


However, EAG concludes that the graduate premium more than compensates local students for the cost of their education (we don’t know whether that is the case for international students and not much enthusiasm from the sector to find out). For women the graduate premium is estimated to be $314,600 and for men $329,900 — figures that are low compared to other estimates – mainly because the OECD factors in vocational qualifications which have been found to have a zero income premium for women (what that says about the state of Australia’s vocational education system is a story for another day). Recent (as yet unpublished) estimates have the income premium for male HE graduates at $615,000 and for women $343,400. That would seem to be more on the money (so to speak).

This segues with another EAG finding: 60% of young Australian women might have an HE qualification (the OECD average is 50%), and half of all doctoral candidates are women, however they earn just 76% of male salaries and they are far less likely to be employed — 91% of tertiary educated men are likely to be employed compared to but 79% of women. We can blame it on childrearing, but there is plenty of evidence to suggest that when an hourly rate of earnings is calculated, women still earn less than men. In other words, entrenched and invisible sexism is the most likely cause.


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