Avoiding the OECD cringe

The Age this morning published my response to Simon Marginson’s earlier op-ed arguing that OECD comparisons show that we are ‘falling off the pace in education’.

My basic points are that:

* despite cuts to government funding, by the (limited) available output indicators things improved during the period that per student funding was declining; and
* differences in funding levels across the OECD reflect different ways of organising higher education finance, not necessarily better or worse ways.

It is an ‘OECD cringe’ to think that the OECD sets benchmarks that we should follow.

A couple of paragraphs were cut out, so I have copied the original in below the fold.


Sixty years ago, A.A. Phillips suggested that Australia suffered from a ‘cultural cringe’, always looking back to England to see if we measured up. These days it is the OECD rather than England that most often sets the standard. OECD reports are scanned to see how Australia compares to other OECD members.

The recent OECD Education at a Glance publication provided another opportunity to see how Australia is going, taken by Professor Simon Marginson in these pages last week.

He noted that between 1995 and 2007 total resources per Australian tertiary education student increased by much less in Australia than in the OECD on average. The OECD does not spell out the detail, but real income per government-supported student was cut each year from 1995 to 2004. The relative decline in public funding was much larger, due to increased rates of student contributions in 1997 and 2005, and many more full-fee students.

Professor Marginson puts this funding outcome down to Australia’s relative low-tax culture, and laments that ‘no wonder Australia is falling off the pace in education’.

Nobody could defend every tertiary education spending decision taken in this country since 1995. But nor are OECD comparisons necessarily useful benchmarks in deciding whether or not ‘Australia is falling off the pace’.

Funding constraints contributed to presumed indicators of quality, such as the number of students per academic, deteriorating significantly. Dire warnings about declining standards appeared regularly in the media.

With academic staff stretched to cover more students, student satisfaction with teaching should have declined. Instead, it slowly but steadily improved from the mid-1990s. The biggest increases were in the proportions of students agreeing with propositions such as ‘the staff put a lot of time into commenting on my work’, just the kind of thing that we would expect over-worked academics to cut back on. Substantially more completing students now agree that their lecturers were ‘extremely good at explaining things’.

With very large minorities giving neutral or negative responses to these propositions we can still do much better. But the trend is positive.

Perhaps this good result has come at the cost of overworked staff. The most recent survey of academics found that they put in an average 50 hours per week. This was slightly up on the 1999 result, but the same as in 1992. On average, workload seems fairly stable over time.

If university courses were increasingly sub-standard, we would expect employers to employer fewer graduates or pay them less. Yet we don’t see that in the employment data. Even in 2009, an economic downturn year, the unemployment rate of recent graduates was lower than it had been in the mid-1990s, and starting salaries continue to increase.

Graduates’ longer-term job performance is even better. A recent study found that the median 2006 graduate earned 40% more in 2009 than they had in their first job after university. An Australian Bureau of Statistics study of census data since 1981 found that employed graduates enjoyed an increasing rate of return on their higher education investment over time, despite the higher initial costs of acquiring a degree.

As researchers have already shown with schools, in universities it seems there is no direct relationship between money spent and outcomes achieved.

Australian universities have improved their productivity, producing more from the resources they have. Better teaching and learning technology is likely to be one major cause of improvement, along with greater attention to academics developing teaching skills. How universities spend their money can be more important than how much they have to spend.

Though the shift from public to private investment is portrayed as a negative, it is possible that it was a force for better outcomes. Anecdotally, Australian students became more assertive on quality issues after they started paying HECS. Reliance on international student fee income certainly focused university attention on meeting quality expectations.

We should carefully monitor teaching methods overseas and the outcomes they achieve. But the OECD’s funding figures show only that there are many different ways to finance higher education, with none obviously setting a standard that all others should follow. An OECD cringe should not guide our funding policies.

Andrew Norton
Research Fellow
The Centre for Independent Studies

6 thoughts on “Avoiding the OECD cringe

  1. Thank you Andrew. “OECD cringe” is precisely the term I have been searching for to describe this tawdry obsession for years. I often wonder whether any other nation on earth so breathlessly awaits validation from the OECD like so many Australians do.

    I felt like crawling under a rock with embarrassment at the recent euphoria expressed by many when Jeffrey Sachs gave us his tick of approval.

    And as for paroxysms of self-loathing the same set descends into whenever some UN Rapporteur and his Gucci-clad court descends and reports…



  2. The OECD cringe cuts both ways. Should the powers that be also eschew OECD rankings when considering tax competitiveness?


  3. iamspam – I’m not saying that all the OECD’s work in trying to construct internationally comparable data should just be ignored (though sometimes despite their best efforts it just can’t usefully be done). My main objection is to treating it as normative rather than descriptive, and then assuming that Australian departures from the norm are bad.


  4. Very good Andrew. I hope when the Global Competitiveness Report next comes out and some business group or free market think tank uses it to say “See, this proves we are lagging behind and so should cut income taxes/deregulate the labour market/blah blah blah” you write a post about GCR cringe.


  5. It’s more likely to be about the dubious research and methodology behind these indexes that try to combine many different things without common units of measurement or non-arbitrary ways of giving different weights to the component parts.

    Global competitiveness, human development, happy planet, economic freedom etc are all explicitly normative and to some extent political gimmicks and I think people take them as such. If people support that agenda then the comparisons might make some sense.

    The OECD is seen as being an above politics authority.


  6. Took the words out of my mouth. Being below the OECD average is always a reason to do more, but being above is not apparently a reason to do less. Cut a potentially unproductive race to the top.

    A clear example of people intuiting competition between nations and wanting to be a winner, where no competition exists.


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