Month: September 2007

What effects would rising uni fees have on the labour market?

~ Andrew Norton ~ 27 Comments

The intuition that rising university tuition fees are a problem is a powerful one, but in need of persuasive theories and evidence to support it. As research cast more doubt on the idea that HECS negatively affected decisions to attend university, the argument switched to its effects after graduation.

The first serious attempt to do so was a paper in 2002 by a University of Tasmania academic, Natalie Jackson, suggesting that HECS might reduce fertility, as couples, and particularly women, postponed having children to pay off their HECS debt first. Though Jackson herself was cautious, given the data limitations, the idea was enthusiastically taken up by proponents of lower HECS, as I noted in my 2003 paper (pdf) criticising the idea. Subsequent analysis using HILDA data, published recently in the Journal of Population Research, showed that my argument was correct.

Another version of the argument is that, because of HECS, graduates will struggle to buy a home. Kevin Rudd has made this argument, effectively suggesting (as I pointed out at the time) that graduates be given a second first home buyers grant not available to the poor plebs who have to work to pay for their homes, rather than getting a wealth transfer from the Commonwealth.

A third version of the argument, which has come up this weekend in The Age and from commenter Matt, is that HECS debts will distort career choices away from public service type jobs towards employment that will generate the cash flow required to repay loans.

As The Age put it:
Continue reading “What effects would rising uni fees have on the labour market?” →

Testing the waters on uni fees

~ Andrew Norton ~ 15 Comments

Basic economics tells us that students won’t just pay any price for a university degree. If market prices become too high, a case can be made, in theory at least, for public policy action to lower the cost to students, to ensure that the labour market has sufficient graduates or to target particular groups of people.

But how do we tell when we have reached such a point? Professor Simon Marginson seems to think that the theory above is sufficient for us to know. An article in this morning’s Age reports that the proportion of university students from a low socioeconomic background hasn’t changed in 15 years, despite two significant price hikes, but Marginson says:

there is a problem with extrapolating the results — if you keep lifting costs, there is likely to be a lag factor before you see evidence that parts of the community are being excluded. “It’s a pretty clumsy way to test the waters.”

In my view, theory can only take us so far in answering what is essentially an empirical question: at what prices will student (or prospective student) behaviour start changing in ways that are, from a public policy perspective, undesirable? We can be confident that we are not there yet. Total applications have dropped since their most recent peak in 2003, but demand still exceeds supply, and by very large margins in some courses at some universities. Demand would not exceed supply if prices were too high.
Continue reading “Testing the waters on uni fees” →

Happiness gender gaps

~ Andrew Norton ~ 2 Comments

In happiness research, the recorded differences between men and women are small. In Australia, however, women are on average slightly happier than men, though the difference can be tiny – 0.2 on a 0-10 scale in the 2005 Australian Survey of Social Attitudes, the most recent data I can find.

In the United States, according to this recent paper (pdf) by Betsey Stevenson and Justin Wolfers, there used to a be a happiness gender gap favouring women, but now it favours men. Compared to 35 years ago, men are on average happier and women unhappier. As Stevenson and Wolfers say, this is a curious result. At least on most of the conventional measures, those were better years for women than for men.

According to The New York Times report of the research:

A big reason that women reported being happier three decades ago — despite far more discrimination — is probably that they had narrower ambitions, Ms. Stevenson says. Many compared themselves only to other women, rather than to men as well. This doesn’t mean they were better off back then.

But wouldn’t men face the added problem also of having to compare themselves to women? Boys now do worse in the classroom than girls, yet statistics reported in the Stevenson and Wolfers paper show that that same trend is apparent in school kids as it is in adults. Though competition with women is less tough in the workplace than in education, men have lost a lot of relative status since the 1970s without, it seems, any negative consequences for their average subjective well-being.
Continue reading “Happiness gender gaps” →

Tolerance vs rights

~ Andrew Norton ~ 12 Comments

In my yet-to-be published debate with Alan Soble about The Peel’s pro-gay door policy for The Philosophers’ Magazine, I argue for The Peel being allowed to decide who it allows in, and he argues for a door policy that does not discriminate on sex or sexual preference.

I think there is a confusion in Soble’s position. On the one hand, he thinks that people should not be disadvantaged because they are gay or straight, or male or female. He supports anti-discrimination law to neutralise so far as possible any negative repercussions of these characteristics (though I am unclear how being straight can be a significant disadvantage, unless you count kids). On the other hand, using anti-discrimination law to prevent gay-only bars entrenches disadvantages of being gay, such as the difficulties involved in identifying and meeting other gay people. You can be gay, but you can’t have institutions that support that characteristic.

A similar confusion is found in VicHealth’s More than tolerance report. It chastises respondents to its survey who would be concerned about a close relative marrying someone from a Christian, Jewish or Muslim background – especially Muslim:
Continue reading “Tolerance vs rights” →

Second-rate rent seeking

~ Andrew Norton ~ 6 Comments

The Australian Vice-Chancellors’ Committee may have changed its name to Universities Australia, but so far at least nothing else seems to have changed. Their recent media releases contain more of the second-rate rent-seeking that has long marred the organisation’s public advocacy.

Last week, in their tradition of ‘good first step’ reactions to government initiatives, they welcomed a small extension of student income support and issued a media release repeating their call for:

“Firstly all scholarships and bursaries (regardless of their source) to be excluded from assessable income for the purpose of student income support; and

“Secondly, a reduction in the age of independence for Youth Allowance from the current 25 years to 18 years over the next term of parliament,”

There is no mention (and nor was there when the proposal was first made in August) of how much these changes might cost, how important this proposal is compared to other higher education spending options (let alone other alternative uses of the money), or other implications of the changes.
Continue reading “Second-rate rent seeking” →

The systemic consequences of big election victories

~ Andrew Norton ~ 59 Comments

Today’s Galaxy poll was more of the same old bad news for the government, another week of no rain in a long electoral drought. Because of the way single-member electorate voting systems exaggerate results, a uniform swing would see the Coalition’s 44% of the vote translate into only about a third of the seats in the House of Representatives.

An election victory that big would have systemic consequences. Voters wouldn’t just be changing the government now, they would effectively also be limiting their choices for the next couple of elections at least, since even being optimistic it would take that long for the Coalition to rebuild to the point that it passed the threshold of credibility as an alternative government. And unless parties pass that threshold, even bad or unwanted governments seem secure.

This is already the problem we have at the state level. In a Galaxy Poll last November respondents were asked whether, based on its recent performance, the NSW Labor government deserved to win the next state election. Only a third of voters thought that it did. Yet the same poll showed Labor leading on the 2PP 52-48, roughly what it in fact got at the subsequent state election. The Opposition has never really recovered from its dismal showing at the 1999 state election. At this distance, the Beattie/Bligh government in Queensland looks to be struggling towards mediocrity even less successfully than the Iemma government in NSW, but it too seems secure in power, because the Opposition is not credible.
Continue reading “The systemic consequences of big election victories” →

Unpopular Muslims

~ Andrew Norton ~ 6 Comments

In a very funny episode of Kath & Kim tonight (including a great cameo by Matt Lucas as Sharon’s half-sister) both racist opinions (Kim) and racial identity based on a distant Indigenous ancestor (Kath) were enjoyably satirised. It was all far easier to take than a sanctimonious report More than tolerance: Embracing cultural diversity for health released this week by VicHealth.

But even tiresome bureaucratic documents can contain interesting data, this time a Victoria-specific study of racism, prejudice and discrimination. 12% of respondents agreed that they were ‘prejudiced against other cultures’, and 10% agreed with a conventionally racist proposition ‘not all races of people are equal’. A similar question in a national survey in 1998 found 16% of the population were racist, and 12% in 2001 in a Queensland and NSW sample.

Most of the questions on actual experience of intolerance or discrimination suggest that a only a small proportion of NESB migrants regularly experience it. It is by far the most likely to occur at a sporting or other public event (15%), perhaps because such events stir tribal passions and the offender is unlikely to see the victim again, easing social pressure pressure for tolerance, or be subject to institutional penalties. The next most likely location is the workplace (7%), though whether from customers or other staff it does not say; followed by education (6%), shops and restaurants (4%), and in housing and policing (3%). The low figure for shops, restaurants and housing perhaps shows again how the profit motive driving out other human sentiments can be a good thing.

Also out this week was an Issues Deliberation Australia report Australia Deliberates: Muslims and Non-Muslims in Australia. Continue reading “Unpopular Muslims” →

A racist ticket policy?

~ Andrew Norton ~ 2 Comments

As reported in this morning’s Age, the Victorian government has introduced legislation to ensure overseas students cannot successfully use equal opportunity laws to receive public transport concessions. There is a case before the Victorian Equal Opportunity and Human Rights Commission alleging the policy that allows domestic but not international undergraduates to receive concessions discriminates on the basis of race.

I had an opinion piece in Education Age earlier this year arguing that the concessions should not be granted. In her second reading speech, Transport Minister Lynne Kosky makes similar points:

Providing transport concessions to private full fee-paying overseas students would be very costly. The money used to pay for extending the scheme to these students would have to come from another area of budget and could impact on other service improvements if the entitlement was granted. In addition, it would be inconsistent with the terms of the students’ entry into Australia. When private full fee-paying overseas students gain a visa to study in Australia, they must demonstrate that they are already fully self-sufficient and able to meet all their living expenses, including public transport expenses, while they are here. The students are required to pay substantial fees to study for their degree and, at the same time, they are also not eligible for benefits such as Medicare, Newstart allowance or Austudy. Unlike Australian citizens, permanent residents and students with refugee status whose intention is to live and work In Australia on an ongoing basis, there is no expectation that private full fee-paying students will continue to live in Victoria beyond completing their education.

Pretty clearly this was not, in any case, an instance of racial discrimination. Continue reading “A racist ticket policy?” →

One expert does not back claims on low uni funding

~ Andrew Norton ~ 7 Comments

The Age‘s sub-editors must have concluded that I am not an ‘expert’ on uni funding. In an article this morning Simon Marginson and Barry McGaw said this week’s OECD report Education at a Glance, which reported declining public funding on tertiary education, was ‘reasonably accurate’. However I was reported as saying that ‘tertiary funding had returned to 1995 levels by 2006’. The headline was not however ‘Experts divided on uni funding claims’ but ‘Experts back claims on low uni funding’.

As it happens, I do think the figure quoted in The Age‘s article of a 4% drop between 1995 and 2004 is ‘reasonably accurate’ (it refers to this Excel table in Education at a Glance). Using the ABS Government Finance Statistics publication, based on Commonwealth spending, I get a 2% drop between 1995-96 and 2004-05; the difference with OECD could be using the financial rather than calendar year (there were subsidy increases for 2005) and/or using a different method of adjusting for price changes.

But by 2005-2006 the ABS clearly shows a surge in spending, so that Commonwealth spending is now well ahead (about $600 million) on 1995 levels, plus approximately $1.2 billion more in HECS revenue (my figure, based on DEST data).
Continue reading “One expert does not back claims on low uni funding” →

More bad reasons for reducing HECS

~ Andrew Norton ~ 26 Comments

Yesterday’s OECDitis seems to be spreading to the nervous Coalition backbench, with two MPs reported (no link, sorry) in today’s Australian as favouring reduced HECS.

West Australian Liberal Mal Washer made the old argument about HECS being a disincentive, plus one I had not seen before:

The reason for HECS originally was the assumption that people with university degrees have higher incomes. With the construction and mining boom, that is no longer the case. We should reduce it, we need to pull it back.

Like the ALP, Dr Washer is getting rather carried away with the importance of mining and construction. Fewer than one in ten Australian workers are employed in either of these industries. And as I noted last year, the relative income advantage of bachelor-degree graduates has declined only very slightly since 2001 (and may be due only to more able and experienced workers being moved to the postgraduate column).

South Australian Liberal Senator Cory Bernardi’s suggestion was no better. He suggested a reduction in HECS for students who undertook volunteer work in the community. But if they are effectively being paid via reduced HECS, it is not volunteer work, is it? And if we are going to pay people to do community work, why not employ the best applicants for the work, rather than the people who happen to have a HECS debt?

Sadly, from the Opposition leader to the government backbench, the higher education ideas offered by our politicians are either obviously daft (like Bernardi’s) or easily discredited (Washer, Rudd).