A bit more on education

One interesting piece of information in the education debate surfaced yesterday. This was a study of disadvantaged kids undertaken by ACER for the Smith Family, which found that, on average, they underestimated the level of education required for the jobs they hoped to get and, correspondingly, planned to finish education too early. This was true both for boys (who mostly wanted trade jobs) and for girls (who were hoping for professional jobs). You can get the whole study here (PDF).

On the whole, this does not look good for Howard’s suggestion that leaving school at year 10 is a sensible idea. Of course, there are exceptions. If you have a job lined up, with a skilled trade apprenticeship and TAFE entry, this makes sense. But in this rare case, you probably don’t need the PM’s advice. The actual labour market experience, and educational attainment, of people who leave school in Year 10 is, in general, far less favorable than this.

Conversely, if the idea that parents are too concerned with encouraging their kids to go university had any basis, it would presumably be reflected in a decline in the wage premium for university graduates. No such premium decline was observed during the 1990s, despite the huge expansion in graduate numbers. Now that the number of domestic students has been held fixed for nearly a decade, it is likely that the premium is rising.

11 thoughts on “A bit more on education

  1. John,

    I take it you mean “No such DECLINE in premium was observed in the 1990s” since you say “despite”. Not that the premium went to zero then.

  2. The primary message that I take from that report is the need for school students to get good advice. With the constant changes in the system it has been really hard for well educated and concerned parents to help their children to make good choices at school and the situation is obviously much worse in disadvantaged families.

    That reinforces the view that it is personal care in various forms that is required in these families. Hence the challenge to concerned people to shift some of their time and energies out of political agitation into personal assistance, or at least support for people and groups who are providing personal assistance.

  3. Ok, on to the actual subject matter. Is the premium measured as a percentage, or a dollar value? – I presume its percentage.

    Also any ideas on why wasn’t there a decline? Is it due to the spread between top and bottom end salaries widening generally masking the effect of a large increase in supply? It seems strange that there would be no effect.

  4. Steve, my analysis is that there is a steady increase in the demand for more-skilled relative to less-skilled labour. If average educational attainment also increases steadily then rising supply matches rising demand and relative wages remain constant. With a stable level of educational attainment, the premium rises.

  5. There’s a good quote on this topic in a Cowra paper. A representative from a local TAFE and apprentices advocacy group points out that: “There is a trend in schools where the smarter students are encouraged to go to university and the ones with a poorer academic record are told they are more suited to a trade.

    “What some career advisers and prospective apprentices don’t realise is there is often a need for proven academic ability in the trades, particularly in an electrical trade where a high level of maths is a necessity.”

    The story also highlights the disincentives to undertaking apprenticeships. Labouring pays $500 per week, while an apprentice gets only $220 per week. more

  6. How could it be that parents anywhere could be too concerned with encouraging their children to go to university? The thought is absurd. The suggestion that less education might well do is absurd, even if a child or might might yet prosper. Imagine worrying about too many university students.

  7. The Howard suggestion is not sensible immediate advice. but it is a sensible direction for policy, in the sense that that sort of option would be better to have around and for more to take up as a result of informed decisions in particular cases. The complaint here is only that they aren’t informed decisions; the remedy is information, not restriction of options.

  8. PM Lawrence

    Thank you, but I agree only if there is always an urging and opportunity for university education. Democracy really must be based on education. Australia will not run out of work, when education is completed, if Australia does not run out of imagination. I do not care for Mr. Howard’s comment.

  9. I think the “too many kids want to go to university” idea has it half right. There are too many kids being churned through narrowly vocational “marketing and spreadsheets” courses the intellectual value of which is dubious, IMO. And such courses become prerequisites for white collar jobs where a good VCE plus in-office training might be more appropriate. And yes, it is good for able kids to consider trades as well as uni.

    That said, if the Libs apply this policy it will be a continuation of “kids with wealthy parents from the eastern suburbs will go to Uni no matter how thick they are, while the kids from working class suburbs will learn a trade and if they’re academically inclined they’ll be discouraged because of the crippling HECs debt.” This would not be progress. We need to emphasise university entry according to academic ability first and motivation (an entry interview) as a close second, NOT parents’ ability to pay. We also need to remove the upfront fees from TAFE and (the horror!) Maybe subsidise apprentices more to compensate for the ridiculous wages they earn, and/or give them a health care card (sorry, dries, you’ll have to have a lie down after reading that.)

  10. My mate,kevin quensell,left school at 13 in 1965.
    I remember that the teacher lectured him in front of the class-he was an idiot to leave, etc.
    Kev went into a plumbing apprenticeship and probably has a worth ten times greater than the teacher.

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