The attainability of university degrees and their labour market benefits for young Australians
I used data from the 1995 cohort of the Longitudinal Surveys of Australian Youth to investigate the factors associated with the attainment of Australian university degrees and estimate their domestic labour market benefits. I considered vertical and horizontal stratification in education and examined monetary and non-monetary benefits. The probabilities of attaining a university degree differed significantly by individual and family background. Individual’s family backgrounds significantly predicted the prestige of their universities, but not their fields of study. University graduates enjoyed higher income and occupational prestige relative to non-graduates. Among university graduates, income and occupational benefits differed significantly by fields of study but less by the prestige of universities. These findings indicate that vertical stratification in education plays an important role in the intergenerational transmission of social status in Australia. My findings suggest that policies should ensure equal access to higher education for young people from disadvantaged backgrounds. Strategies to reduce inequality in higher education are discussed.
KeywordsHigher education University degree Returns on education Youth labour market Occupational prestige Vertical stratification Horizontal stratification
Funding and support for this project was provided by the Australian Government Department of Education, Employment and Workplace Relations through the Longitudinal Surveys of Australian Youth (LSAY) Research, Innovation and Expansion fund research fellowships managed by the National Centre for Vocational Education Research (NCVER). The views and opinions expressed in this paper are those of the author and do not necessarily reflect the views of the Australian Government, State and Territory governments or NCVER. I thank anonymous reviewers and Emeritus Professors Michael Pusey and Ralph Hall for helpful comments.
- Australian Bureau of Statistics. (2011). Perspectives on education and training: Social inclusion, 2009. Retrieved January 15, 2013 from http://www.abs.gov.au/ausstats/abs@.nsf/Lookup/4250.0.55.001Main+Features32009.
- Baum, S., & Mitchell, W. (2008). Adequate employment underutilisation and unemployment: An analysis of labour force outcomes for Australian youth. Australian Journal of Labour Economics, 11(3), 187–201.Google Scholar
- Borland, J., Dawkins, P., Johnson, D., & Williams, R. (2000). Returns to investment in higher education: The Melbourne economics of higher education research program. Melbourne: The University of Melbourne.Google Scholar
- Department of Immigration and Border Protection. (2013). Fact sheet 2-key facts about immigration. Retrieved November 11, 2013, from http://www.immi.gov.au/media/fact-sheets/02key.htm#c.
- Grubb, W. N. (1993). The varied economic returns to postsecondary education: New evidence from the class of 1972. The Journal of Human Resources, 28(2), 365–382.Google Scholar
- Haveman, R., & Smeeding, T. (2006). The role of higher education in social mobility. The Future of Children, 16(2), 125–150.Google Scholar
- Marks, G., & Fleming, N. (1998). Youth earnings in Australia 1980--1994: A comparison of three youth cohorts (LSAY research Report no. 8). Camberwell: Australian Council for Educational Research.Google Scholar
- Ministerial Council on Education Employment Training and Youth Affairs. (2008). Melbourne declaration on educational goals for young Australians. Retrieved from http://www.curriculum.edu.au/verve/_resources/National_Declaration_on_the_Educational_Goals_for_Young_Australians.pdf.
- National Centre for Vocational Education Research. (2009). Longitudinal Surveys of Australian Youth (LSAY) Y95 cohort: User guide (technical report 49). Adelaide: National Centre for Vocational Education Research.Google Scholar
- O’Leary, N. C., & Sloane, P. J. (2005). The return to a university education in Great Britain. National Institute Economic Review, 193(1), 75–89.Google Scholar
- OECD. (2002). Education at a glance 2002: OECD indicators. Retrieved from http://www.oecd.org/edu/skills-beyond-school/educationataglance2002-home.htm.
- OECD. (2012). Education at a glance 2012: OECD indicators. Retrieved from http://www.oecd.org/edu/EAG%202012_e-book_EN_200912.pdf.
- Paulsen, M. B., & St. John, E. P. (2002). Social class and college costs: Examining the financial nexus between college choice and persistence. Journal of Higher Education, 73(2), 189–236.Google Scholar
- Raudenbush, S. W., & Bryk, A. S. (2002). Hierarchical linear models: Applications and data analysis methods (2nd ed.). Thousand Oaks: Sage.Google Scholar
- Rothman, S. (2009). Estimating attrition bias in the year 9 cohorts of the longitudinal surveys of Australian youth (Longitudinal Surveys of Australian Youth technical paper no. 48). Camberwell: The Australian Council for Educational Research.Google Scholar
- SAS Institute Inc. (2011). SAS 9.3. Cary: SAS Institute Inc.Google Scholar
- Snijders, T., & Bosker, R. (1999). Multilevel analysis: An introduction to basic and advanced multilevel modeling. Thousand Oaks: Sage.Google Scholar