Archive for December 18th, 2008

Youth Allowance reform

Though the Bradley report fails on the key funding issue, not all of it is bad.

Earlier in the year, we debated the ‘independence’ test for Youth Allowance. I thought it should be tightened to exclude those satisfying a soft work test, but really still living at home dependent on their affluent parents.

The report provides new information on this issue. It shows (p.52) that ‘independent at home’ has been the only growing class of YA recipients over the last few years, though there was a small lift in other categories over 2006-07. Work Bruce Chapman carried out for the review using HILDA data found that 36% of Youth Allowance recipients were in households earning more than $100,000 a year. By contrast, only 32% of recipients were in households earning less than $50,000 a year. It’s quite a small sample (136 students), but supports other evidence that YA has turned into middle-class welfare rather than a program that assists genuinely needy people to attend university.

Sensibly, the Bradley report recommends abolishing these ‘independence’ categories, but lowering the age of automatic independence from 25 to 22. Money would be diverted to increasing how much parents can earn from $31,400 to $42,500, increasing the amount students can earn, and increasing benefits by an unspecified amount. Existing rorters of YA can, however, rest easy – current recipients will be ‘grandfathered’ out.

How high is Australia’s uni drop-out rate?

The report of the Bradley review of higher education policy says that Australia’s university completion rate was 72% in 2005. For this they rely on the OECD’s Education at a Glance publication.

The reason the review report doesn’t use an Australian source is that we actually don’t know what our completion rates are. The attrition rates occasionally published by DEST/DEEWR on a year-to-year basis count someone taking a year off or changing institutions as a ‘drop out’, but someone dropping a course but staying at the same institution in another course as a retention.

The OECD calculates its drop out rate by taking completions as a % of commencements n years earlier. But this is far from straightforward in the Australian statistics, since some people will be counted as ‘commencing’ more than once if they change courses. There used to be a ‘new to higher education’ commencing figure, but unfortunately it no longer seems to be published. But if I remove from the 2005 commencers those admitted on the basis of previous higher education and age the cohort three years I get a completion rate of 87%. Of course this is also highly problematic because some courses are longer than 3 years, and many people take more than 3 years to complete a 3-year course (and many of the people who completed a course will not have enrolled in that particular course originally). But it highlights how statistical factors influence results.
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