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. But if student preferences count for something, as I think they should, then the official unmet demand figure is too low. Indeed, we could go further than Birrell et all and argue that even people who are actually enrolled could also be counted in ‘unmet demand’ because they are not in the course, or not in the university, that they wanted.
However, I don’t think that all demand should be met. Universities should not be obliged to take students they don’t think are suitable. If a student with an ENTER of 65 only applies for medical courses, the fact that they are rejected and turn up in ‘unmet demand’ statistics is not a system failure. The unmet demand I am concerned about is the turning down of students who would have been taken were it not for the government’s quota system.
Unmet demand on Universities Australia’s calculation is concentrated among relatively weak applicants. For students with an ENTER of 70 or above nearly all receive offers, though 16-18% of them decline those offers. As I argued towards the end of my graduate mismatch paper (pdf), we should be cautious with people with ENTERs under 70. They are more likely than higher-scoring applicants to get poor academic results if enrolled, giving us reason for concern that they either won’t finish or will be over-represented among graduates not in employment matching their formal qualifications. As Universities Australia only removes applicants with ENTERs below 53 on the grounds that they are not academically qualified, then there is an argument that their unmet demand calculation is too high. They are counting some people who are unlikely to be offered a place under any system, and who probably should find some other form of further education. Their rejection may be personally disappointing, but it is not a policy problem.
Either way, Birrell and his colleagues are right to draw attention to the fact that ‘unmet demand’ is not a straightfoward statistic like how many students actually enrol. Both the number and its significance depend heavily on assumptions about policy goals, and the Universities Australia number fits the perspective of a central controller indifferent to student preferences, rather than the perspective of those who think all (or almost all) student demand should be met, Birrell and his colleagues, and those, like me, who think that supply should be able to move in response to demand.