The economics of graduate-entry courses

Last week the SMH reported that the University of Sydney was abolishing its undergraduate radiation therapy course in favour of a graduate course. The University’s explanation is that ‘the change was in line with a move towards graduate entry for many of its professional degrees.’

Since graduate-entry but initial professional entry degrees are relatively new in Australia we don’t have any strong evidence on their human capital economics. From a theoretical perspective, however, I would have thought there could be potential human capital benefits for occupations likely to benefit from study in more than one field (eg managers, public servants and other policymakers, lawyers, teachers, academics), and possible financial reward for having broader knowledge and skills. In any case, at least at the upper levels of most of those occupations have high earnings, and so additional degrees for general interest and enjoyment are affordable.

However financial rewards from added degrees are less likely for occupations which require highly-specialised technical knowledge but little else in the way of university-level education. All the health professions except perhaps those related to mental health would seem to fit into this category. And except for medical practitioners and dentists, the health professions generally pay salaries that could easily represent low rates of returns on investment if initial education cost significantly more.

The salaries received in 2006 by people with degrees in radiography, the field of study covering radiation therapy, shows that most are not high earners. Only about 15% earn more than $80,000 a year, and many of the incomes are likely to be the part-time salaries we would expect in a 70% female group of graduates.

Weekly earnings of radiography graduates, 2006
radiography
Source: ABS, Census

I can’t find any explanation of whether Sydney will offer the places on a Commonwealth-supported or full-fee basis, but on currently advertised charges students would be up for between $15,000 and $34,000 in extra tuition costs, and also significant opportunity costs in forgone wages by delaying entry to the workforce.

The University of Sydney should be allowed to make the decision to go graduate entry and pay the commercial price if their judgment is wrong. However, the only current alternative course in NSW is at the University of Newcastle. Gillard’s demand-driven higher education system does allow competitors to enter the market – but only if they are existing public universities. A properly competitive system needs to permit other entrants to take advantage of / deal with mistakes by the current players. The existing professional assocation or the hospitals may have an interest in teaching radiation therapy to undergraduates.

9 thoughts on “The economics of graduate-entry courses

  1. Fortunately we have a nice experiment going on which should reveal a lot. Sydney University has graduate medical school entry only; UNSW has undergraduate entry. Likewise Melbourne University and Monash. Soon we will be able to follow the career and salary paths of doctors from the two streams.

    Of course even if there are no benefits accruing to the individuals from graduate entry, there might be benefits to society in getting more rounded, mature doctors. Or not, as the case may be.

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  2. I could be wrong about this, but I believe that radiographers are in rather short supply. Therefore, you are basically guaranteed a reasonably well payed job with the degree — so for many people in average non-professional jobs, it’s probably not a bad investment. I can’t see why it is worthwhile for any association to teach the degrees incidentally — surely they would be better off restricting supply, as it might help drive wages up (this is of course a tactic adopted by a number of different medical and allied-health groups).

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  3. Son of the Ratpack @1: While it’s a truism that a little bit of general study at uni can’t hurt, I rather suspect the Monash and Melbourne Model stems more from the last gasps of the Howard regime’s Culture Wars.

    The more you can lock access to high power and pay professions behind expensive course fees and inadequate income support for poor students, the fewer of “them” get through and the more “of the right type” dominate. It’s a very British and American class divide thing. Quite disappointing to see it finally make its way here, but, I guess some of the plebs were still making it to graduation despite the poor income support; by taking on part time jobs, and so on. The cheek of the rotters, eh what!

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  4. As someone who was on the ‘inside’ during the initial U of M discussions on what became the ‘Melbourne Model’, I can assure readers that Pete’s theory has no substance at all. Indeed, there were hopes that a graduate-entry model would break the lock Melbourne’s leading private and selective schools have on law and medical degrees, which is what happens when entry requirements require applicants to be in the top 1-2% of school leavers.

    BTW, Monash has not changed its model.

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  5. “However financial rewards from added degrees are less likely for occupations which require highly-specialised technical knowledge but little else in the way of university-level education. All the health professions except perhaps those related to mental health would seem to fit into this category. And except for medical practitioners and dentists, the health professions generally pay salaries that could easily represent low rates of returns on investment if initial education cost significantly more.”
    I think your conclusion raises interesting questions. What you seem to be saying is that practitioners of almost all medical/health professions do not and would not benefit from studying something else broader at uni – which I don’t disagree with. You then say that because radiologists don’t earn much, their returns from getting qualified might become low enough to discourage them from joining the profession altogether – again I agree and this would clearly be a bad thing. By contrast, because doctors and dentists earn a lot, they would still find it worthwhile to do both the required undergraduate and graduate degrees they need to get qualified. But surely this also means that the personal and social costs of forcing them to do the undergraduate degree are high – perhaps even higher than the impact on the radiology market. In other words, based on market values, it may be even more harmful to delay the entry of new doctors and dentists into their professions by 3 years than to lose outright a whole bunch of new radiologists. In any case, based on this logic, is social engineering the only reason the Melbourne Model includes training of the health professions?

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  6. Rajat, under Post-grad entry to Med I don’t think it adds 3 years. My understanding is that UGrad Med is 6 years, post-grad pathway is usually 3 years of Bio-Med Science, then 4 years of Post-grad Med.

    The graduate pathway makes sense is subject areas where the early years are quite general and then get specific later on. E.g Engineering for the first two years has a lot of subjects in common with maths/physics/chemistry from the Science discipline.

    The advantage for something like Med is that you can select those who are good at university level learning (not just Yr12, which is in general not challenging for potential Med Kids). You are also selecting people who are 3 years more mature and have a much better idea what they want to do.

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  7. M, yes, fair enough – if it’s only one year extra, it might make sense to postpone the day of reckoning.
    I wonder if it will actually break the private/selective stranglehold on medical places, though. If students enter science degrees knowing that entry into medicine will occur later, students of schools from which there are likely to be many prospective candidates (ie private and selective) may be more inclined to work collectively through their science courses to help each another get in, to the disadvantage of the odd single kid from a normal state school.

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  8. I think the new system will somewhat change who does medicine, but not dramatically. It will still be dominated by the top few % of the cohort, most but not all of whom will have been correctly identified by the original ENTER system. During the undergraduate years, some who might otherwise have done medicine will decide it is not for them after all, and some others will show through their uni studies that they have what it takes. But given the very strong relationship between SES and academic achievement, most are still likely to come from private schools, selective schools, and the government schools in middle class areas that traditionally do well in Year 12.

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  9. “I think the new system will somewhat change who does medicine, but not dramatically.”
    .
    There must be data on that — my bet is that there is in fact a reasonable change. Personally, I know a few people who didn’t get 99.9 for their TER but got in after their degree. I also know a few people who got in after doing a PhD. Of course, since I know next to no people that got 99.9 on their TER, my sample is completely biased.
    .
    It seems to me that the killer for many people is the basic physics section of the GAMSAT, since almost no science graduates do physics these days and many others forget the often non-compulsary maths that they did (or didn’t do) in first year which would help in learning that. However, for people that don’t find that too difficult, I don’t think the GAMSAT is too hard. I therefore think there are probably quite a few people who can get everything correct that didn’t in Year 12 for many reasons, not least of which is that many people are far more studious when they are 22 versus 17. I guess a different way of thinking about this is that if you got a TER of 90 and didn’t go to an elite school, then how much harder is it going to do a perfect job on the GAMSAT four years and a degree later? My bet is not very much, but letting those people in will massively change the distribution of people becoming doctors.

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