There were two higher education research papers reported today. Most publicity went to Bob Birrell and Virginia Rapson’s Clearing the Myths Away: Higher Education’s Place in Meeting Workforce Demands, which Birrell summarises here. According to Birrell, attacking the ‘myth’ that too much attention has been placed on higher education and too little on trades:

Between 1996-97 and 2005-06, overall employment increased by 20 per cent but the number of professionals, associate professionals and managers grew at nearly double this rate. By 2005-06, 38 per cent of all employed were in one of these three occupational groups.

To meet this demand, however, there has only been a marginal increase in university commencements by domestic students over the past decade. The Federal Government has maintained an effective cap on the number of university places for domestic students since it came to office.

Certainly, employment growth in the occupations traditionally targeted by graduates has been strong. But what Birrell and Rapson never mention is the actual number of people completing university qualifications. In virtually every year, these numbers exceed, usually by a large margin, net job creation in the relevant occupations. Sure, there are more vacancies than the annual increase figure would indicate due to retirements, women going on maternity leave, people moving overseas, etc. But not enough to stop us having a large ‘reserve’ graduate workforce, of about 400,000 people with degrees working in occupations that are highly unlikely to require them such as clerical and sales (you can work it out from this ABS report).

What we have in Australia is not a general shortage of graduates, but shortages in particular fields. This in turn is a failing of the quota system – a topic that I am sure anyone who has read me regularly is by now thoroughly bored with. Though in recent years, as Birrell and Rapson acknowledge, the government has been busy creating new university places in areas of workforce shortage, there is at least a 3 year lead time, and in some disciplines (like medicine) much more, before these students enter the professional workforce. The policy failing of the second half of the 1990s wasn’t too few university students overall, it was not letting the system adjust to meet the demands placed on it.

Birrell and Rapson also say that ‘many’ potential students with modest academic records ‘are likely to have been discouraged from attending university by the HECS debt they will accumulate…’. This paper by Chris Ryan and Buly Cardak, reported on here today, certainly shows that there is a strong relationship between ENTER score and university participation. But it’s very hard to show that the prospect of a HECS debt has negative consequences. Many people, for instance, claim that low SES students are more debt averse than students from more affluent families. But this paper shows that for a given ENTER score low SES and high SES school leavers have nearly identical rates of university participation. Though potential students with modest academic records cannot be expected to know statistics on university progress or employment outcomes, perhaps they intuitively understand that they are likely to not do as well at their university studies as their peers with stronger academic records, and risk ending up in jobs that are little better than those they could get straight out of school?