What is ‘unmet demand’ for university?

As well as taking issue with my analysis of the graduate labour market, Bob Birrell and his colleagues take issue, in their People and Place article, with the Universities Australia (formerly known as the AVCC) statistics on unmet demand.

The universities themselves, and the government, argue that unmet demand for university places is now minor – 13,200 was the estimate for 2007, a little more than a third of what it was three years ago. Birrell and his colleagues say that this seriously understates the true figure, because Universities Australia (UA) discounts aggregate unmet demand – the number of people who applied for a place but did not get one.

I don’t fully agree with the Birrell et al critique, but it raises important issues about how ‘unmet demand’ should be calculated. The UA methodology takes out those applicants who applied for only one or two courses, presumably on the argument that many of them could have secured a place had they been more flexible in what courses they were prepared to take. Of the remaining unsuccessful applicants, the UA then discounts the number again by the ‘state rejection factor’, ie given that a certain percentage of people who are offered a place turn it down, it is reasonable to assume that a similar percentage of unsucessful applicants would also have declined their offer had they received one. As Birrell et al point out, one likely reason for rejections is that applicants were not offered the place they wanted.

From the government/Universities Australia perspective, this discounting make sense – their object is to fill the places allocated by the government, not to meet student demand. Continue reading “What is ‘unmet demand’ for university?”