Category: Employment & work

The benefits of paid work while studying

~ Andrew Norton ~ 15 Comments

I have in the past been sceptical of claims that encouraging students to spend fewer hours in paid work is a worthwhile public policy goal. Recent research supports this scepticism.

The most detailed findings are from the Graduate Pathways Survey. Key points:

* no relationship between paid work and average overall grade
* working for pay during study is positively related to employment after graduation
* mean satisfaction score for those not working was 62 – the same as those working between 11 and 20 hours
* developmental outcomes were enhanced through paid work – an increase from 42 to 46 on the 100-point scale

Developmental questions related to understanding people of other racial and ethnic backgrounds, solving complex, real-world problems, developing a personal code of values and ethics, contributing to the welfare of your community, developing general industry awareness and understanding different social contexts.

As in previous research, the negatives only develop with very long hours at paid work, well beyond what most full-time undergraduates are doing. Key points:
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Do Group of Eight graduates earn more?, part 2

~ Andrew Norton ~ 8 Comments

In March, I reported academic research showing that employers appeared unwilling to pay premium salaries for graduates who had been to Group of Eight universities.

Another report released this week, 2008 Graduate Pathways Survey: Graduates’ education and employment outcomes five years after completion of a bachelor degree at an Australian university, gives some grounds for thinking that as graduates acquire work experience those from Group of Eight universities receive larger salary increases. The report is the first from the Graduate Pathways Survey, which in this case retrospectively asked people who completed their courses in 2002 about their progress since then.

It found that:

Go8 graduates tended to see the largest steady increase in salary over five years from $35,000 (2003 dollars) to $63,000 – an 80 per cent increase. ATN graduates salaries increased from $42,000 (2003 dollars) to $64,000 (60%). IRU [Innovative Research Universities, eg Murdoch, La Trobe, James Cook], regional and metropolitan university graduates’ salaries increased at slightly lower rates to reach $56,000 (up 56%), $61,000 (up 51%) and $60,000 (up 54%) respectively.

Australian Technology Network (ATN) universities are, however, still slightly ahead in absolute terms.

Unfortunately, there is no statistical analysis in this report to see whether there is a distinct Group of Eight effect, or whether (as is possible) this is a function of other labour market characteristics of the graduates. Presumably the age and discipline mix of graduates will affect the scope for rapid salary increases. And of course even a finding that controlling for these things there is a Group of Eight effect, it does not show that attending a Group of Eight university was a causal factor, given the higher prior average academic ability of these students.

Conflicting Ernie awards?

~ Andrew Norton ~ 43 Comments

Last night’s post on the economics of higher education included this (deliberately provocative) comment:

The efficient level of investment for a bright, hardworking young man (men being more likely to work full-time throughout their careers) is likely to be massively higher than for a middle-aged women of average intelligence filling in time after the kids have left home…

Kim at LP and most though not all the following commenters rise to the bait, demonstrating not my sexism but how their normative assumptions (men and women should be treated equally, with which I agree) over-ride their analytical abilities.

I was not passing any judgment on the relative ability of men and women. Indeed, women now significantly out-perform men at school. Nor was I commenting on appropriate gender roles. Men and women can make up their own minds on work and family activities and the split between them.

Rather, I was writing about a paper on the economic benefits of higher education, which for a given graduate are the hourly additional value they produce in the workplace compared to if they had not attended university multiplied by the number of hours they spend at work.

This issue cannot be anlaysed via my actual or supposed gender attitudes. For all the changes in social attitudes over the last 30 years, men are still significantly more likely to work full-time than women. This is true of graduates as well as non-graduates (there’s a graph from 2003 on p.9 of my FEE-HELP paper).
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Was WorkChoices good for union membership?

~ Andrew Norton ~ 1 Comment

As the ABS reported yesterday, trade union membership experienced a rare increase in absolute numbers in 2008, up by more than 3%. While growth in public sector numbers, as The Age notes, explains a good proportion of this, many industries which have low public sector involvement also enjoyed strong increases (though union membership continued to decline in many industries as well).

Though WorkChoices made it harder for unions to access workplaces to recruit, the overall policy framework of WorkChoices should have been a positive for unions. As Michael Warby has long argued (most recently in the Autumn 2009 issue of Policy; available in newsagents) government setting of wages and conditions is bad for unions, because it delivers improvements to workers without them having to employ unions to bargain on their behalf. A policy that reduces the power of tribunals and increases the rights of employers should therefore be good for unions, because it gives workers a reason to employ them to negotiate better wages and conditions.

Labor’s partial resurrection of a regulation-based approach to industrial relations should therefore be a net negative for union membership, even though the system overall is good for union officials in giving them more rights and powers than they had under WorkChoices.

Whether this will translate into a reversal in union membership next year is hard to say. There are at least two factors working in favour of union membership increasing, in improved access by unions to workplace and a business cycle shift in power away from employees towards employers. For employees, this makes union membership a more attractive investment. On the other hand, the sheer scale of job loss will make an absolute increase in union membership unlikely, even if the % of workers who are union members increases.

Do Group of Eight graduates earn more?

~ Andrew Norton ~ 17 Comments

In full-fee markets, Group of Eight universities charge a large fee premium over their less prestigious competitors. But is this a good investment by students?

According to an article in the latest Australian Economic Review, reported on in the SMH this morning, the answer is no – at least for new graduates.

Using data from the 2003 starting salaries survey carried out by Graduate Careers Australia, UWA academics Elisa Rose Birch, Ian Li and Paul W. Miller found that while choice of industry (mining especially), occupation and having an honours degree all matter, once other factors are controlled for ‘university effects have only minimal impacts on graduates’ starting salaries’.

If this pattern persists as graduates’ careers continue, it would be remarkable: that the brand value of prestige institutions and the presumably higher average innate ability of Group of Eight graduates count for near-nothing in the labour market.
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Australia’s workers no longer feel secure

~ Andrew Norton ~ 1 Comment

Last November, Australian workers were still confident that the GFC wasn’t going to affect their employment. Despite the bad international and stock market news, workers still mainly perceived that as bad news affecting other people.

An Auspoll survey released by the AWU this week suggests that this personal confidence is diminishing. While last year’s Morgan poll found 18% of respondents believing that they had a chance of unemployment, the Auspoll finds that 17% of workers are very concerned about their jobs and another 24% are concerned. The different question makes comparisons problematic, but that may be greater insecurity than the 32% in the Morgan series who were worried about their jobs at the peak of the early 1990s recession, though obviously actual unemployment is to date much lower than then.

On the optimistic side, while nearly a third of workers in 1992 feared that they would lose their jobs less than 10% did.

Will the downturn have a scarring effect on graduate jobseekers?

~ Andrew Norton ~ 8 Comments

In the SMH last Friday, there was a warning that the economic downturn may have a scarring effect on new jobseekers:

“Invariably in a recession we have this problem where a generation can get lost,” said the deputy director of the Melbourne Institute, Mark Wooden.

Most at risk are youth from disadvantaged areas who, in the past, have stood a chance of finding decent-paying jobs and learning skills they will hold for life.

Though they are not ‘disadvantaged’ in the sense meant by the SMH article, I have wondered in the past about graduates who enter the labour market during a recession. Does it have has long-term effects on their career success?

More than at other times, during recessions new graduates need to take jobs that don’t use their qualifications but give them an income. At the very least, they delay accumulating experience that should be rewarded in future professional or managerial jobs. At worst, employers for jobs that would use the graduate’s qualifications might infer from a CV of full-time clerical or sales jobs that there is a reason the graduate has been overlooked for more demanding or responsible positions. The early bad luck of graduating into a recession could have a lasting, scarring effect on job success.

The early 1990s recession provides a guide as to what might happen in this downturn. The Graduate Destination Survey records that 1992 and 1993 were the shocker years for graduate employment. From the mid-1980s to 1990, un- or under-employment of graduates had been around 10% (the measure is percentage of graduates who are looking for full-time work who have found it). In 1992 and 1993 un- or under-employment was nearly 30%.
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Bradley’s social justice mindset

~ Andrew Norton ~ 10 Comments

The term ‘social justice’ doesn’t appear anywhere in the Bradley report on higher education policy, but the idea is everywhere in the section on ‘access’. Advocates of ‘social justice’ believe that they can describe in advance what a just society would look like; the actual interests and preferences of the individuals involved typically do not count for much.

The social justice mindset is behind the targets for ‘under-represented’ groups set out by the Bradley committee. They believe that by 2020 the proportion of students from the lowest 25% of socieconomic postcodes should be 20% of the university population. It’s currently in the 15-16% range. They don’t even attempt to defend this figure; like many other numbers in this intellectually weak report it seems to have been taken out of the air as sounding about right.
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Over-qualified workers

~ Andrew Norton ~ 24 Comments

NATSEM research released yesterday confirmed that on average higher education pays off. Compared to someone with Year 12 education only, the average graduate will have lifetime earnings of $1.5 million more, after deducting forgone earnings while studying.

But the annual ABS Education and Work survey, released today, again suggests that this average may conceal large variations in actual graduate outcomes. Despite the good-as-it-is going-to-get economic conditions (the survey was carried out in May), 26.3% of graduates were working in jobs that the ABS occupational classifications system says require vocational or no post-secondary education rather than higher education. That’s only .2% lower than last year.

Work I have done on data from the 2006 census suggests that it is the generalist degrees, and particularly arts (with the exception of those with degrees in ‘philosophy and religious studies’), that drag down the average. About 40% of other Arts graduates are in jobs that don’t require higher education.

There are still big gaps in our knowledge about this group of seemingly over-qualified workers, particularly on the extent to which their employment outcomes are either wanted or, if not wanted, temporary.

Australia’s surprisingly secure workers, part 6

~ Andrew Norton ~ 7 Comments

The most recent Roy Morgan employment perceptions survey provides interesting insight into how people are thinking about the widely expected economic downturn.

On the one hand, 70% of respondents believe that unemployment will increase over the next 12 months, the highest figure since the last recession, and the 3rd highest number recorded since Roy Morgan started asking this question back in 1975.

But this is what is going to happen to other people. The proportion of respondents who think that their own job is safe is 80%, the same as twelve months ago.

The proportion who think that they could find another job quickly is down, from 72% to 63%, but last year’s figure was exceptionally high. 63% is a normal number for this decade.

These figures suggests that very few people yet think that they are personally threatened by the downturn, and most of the worry is the seemingly normal concern people have when their employer isn’t doing so well or they feel that their employer might not want them.

I call all these posts “Australia’s surprisingly secure workers”, but that’s a reference to the exaggerated claims of job insecurity frequently made in the media (and indeed in books by people who should know better). These Roy Morgan figures actually surprise me.