HECS for sportspeople

May 6, 2008 ~ Andrew Norton ~ 40 Comments

In one of the many possible budget savings that probably won’t be announced next Tuesday, Andrew Leigh suggests charging elite sportspeople for their Australian Institute of Sport education. This is a rare issue on which I broadly agree with The Australia Institute, which put out a paper (pdf) some years ago callling for income-contingent loans for AIS sportspeople, as Andrew L also proposes today.

Currently Australia’s elite sports education costs about $130 million a year, though I could not quickly see how much of that was directly spent on people enrolled at the AIS. Even if all of it was recovered it would not exactly be a major blow against big government, but worth doing.

Governments have, however, long been wary of this idea. I’m not sure whether this is because they think the negative publicity involved with popular sportspeople criticising them outweighs the relatively small financial benefits the scheme would bring to the government, or whether they were worried about triggering ‘HECS for TAFE’ (assuming that the AIS is a glorified TAFE) controversy. Perhaps a bit of both.

Still, if the punters can be conned into structural reductions in spending to supposedly deal with a cyclical inflation problem, we should take advantage of this political opportunity.

Can business students do their sums?, #2

April 29, 2008 ~ Andrew Norton ~ 5 Comments

Last year, after the federal government let universities increase annual student contribution amounts for commerce and economics students by $1,200, I predicted:

Applications for business degrees will not move outside the normal +/- <1% market share we see for most disciplines each year.

The basis of my prediction was that applications are primarily driven by interests, and that while financial factors can influence course choices within the range of a person’s interests, these financial factors will not just include course costs, but the anticipated long-term costs and benefits of a particular course choice. Business and economics students, even more than other students, are likely to be able to do their sums and realise that $3,600 in additional course costs is trivial compared to the long-term earnings gains they can reasonably expect.

Damien Eldridge wasn’t so keen on my analysis, pointing out (correctly) that what mattered here was the marginal economics and commerce student, and that a shift in relative prices could see some move to other disciplines that interest them. He suggested that they might go to geography or sociology.

The applications data for 2008 was released today, which shows that my prediction was correct but also reports numbers consistent with Damien’s analysis. Management and commerce did lose market share, by 0.31% of all applications. As usual, no discipline gained or lost by more than 1% market share, demonstrating the high year-to-year stability observed in this data, despite occasional shifts in relative prices. The broad discipline cluster that includes geography and sociology gained 0.43%. Engineering draws on similar quantitative skills to commerce, and many engineers end up as managers, so I think this would be another (and perhaps more likely) alternative course, and it gained 0.53% of market share. Continue reading “Can business students do their sums?, #2” →

Fellow-student funded overseas holidays: the latest anti-VSU argument

April 27, 2008 ~ Andrew Norton ~ 7 Comments

As we saw in the case of Joy Kyriacou a couple of weeks ago, there are people whose sense of entitlement to the earnings of others is completely shameless. Ms Kyriacou, as readers may recall, thinks that her fellow Australians shoud pay higher taxes so that she does not have to postpone her first overseas holiday while repaying her HECS debt.

This morning The Age brings us La Trobe University sports manager John Dumaresq, who in a criticism of voluntary student unionism that looks more like a defence to me, explains why it is harder than before VSU to get members of the women’s football team to go to interstate matches:

“Students think, well, I can spend a week on the Gold Coast or I can work and at the end of the year with $700 [the cost of the Gold Coast footy trip] I can go to Thailand or Vietnam for an overseas trip.

They have to weigh it up, but in the past they might have done both because it was subsidised,” Mr Dumaresq said.

So on Mr Dumaresq’s view, other students – who if we believe NUS are poverty-stricken – should pay higher charges so that women footballers can go to the Gold Coast and on an Asian holiday.

I do not support price control, and therefore I cannot support that aspect of the VSU legislation. But as I have always conceded, the previous system was riddled with inequities and inefficiencies. The forced unbundling was useful shock therapy in clearing these away.

When the system is deregulated, universities will presumably think carefully before including the cost of too many student junkets in their price structure.

Do we have too few graduates?

April 16, 2008 ~ Andrew Norton ~ 20 Comments

No matter how many times Bob Birrell updates his argument that we need more graduates, he gets lots of publicity. This morning was no exception. According to The Age

THE Federal Government should massively increase university places rather than offer 450,000 new training places if it wants to equip young Australians with the skills needed in future, a Monash University study has argued.

Similar stories appeared in the SMH and The Australian.

The basic argument goes like this: there is strong employment growth in managerial, professional and associate professional occupations. However, growth in university commencements has been much lower, and even fell in a few disciplines between 2002 and 2006. Employers have had to use migrants to fill vacancies. Therefore we need more graduates.

However, on closer examination of the evidence the argument falls apart. Of these three broad occupational groups, only professionals are truly dominated by graduates. As I noted in my paper on this issue last year (pdf), only about 20% of associate professionals have degrees. Indeed, the category has now been abolished by the ABS and the occupations that it used to cover distributed to other broad groups. Some of them have gone to ‘professionals’ and ‘managers’, but most went to occupations that do not normally require degrees.

Similarly, ABS Education and Work 2007 shows that less than a third of managers have degrees. Presumably many of them are in small businesses. Perhaps they would be better managers if they had degrees. But we cannot assume that a growth in managerial positions will require an equivalent number of graduates. Even among professionals, 30% don’t have degrees.
Continue reading “Do we have too few graduates?” →

Taxpayer-funded overseas holidays for graduates: the latest NUS anti-HECS argument

April 13, 2008 ~ Andrew Norton ~ 16 Comments

According to a story in today’s Sydney Sun-Herald, the National Union of Students is calling for an inquiry into the ‘economic impact of student debt’. Unfortunately for them, the human interest aspect of the story – one Joy Kyriacou (who by I am sure by complete coincidence has the same surname as former NUS President Daniel Kyriacou) – could not get her lines straight and revealed NUS’s campaign as the shameless rent-seeking that it is:

Ms Kyriacou, who graduated with a Bachelor of Education and Bachelor of Arts from the University of NSW in 2006, said the $16,000 student debt burden was stopping her from saving for other things, like her first overseas trip or a house deposit. (italics added)

Of course it was bad enough that we were being asked to to finance a special first home buyers grant for graduates. But now we are being asked to fund their overseas holidays as well. Even by the very low standards of arguments against HECS, this one is a shocker. Continue reading “Taxpayer-funded overseas holidays for graduates: the latest NUS anti-HECS argument” →

Does paid work undermine the university experience?

April 9, 2008 ~ Andrew Norton ~ 11 Comments

In January I was sceptical, based on studies of student work and academic results, that increasing Youth Allowance to reduce work hours would pay academic dividends.

The first results (pdf) from the Australian Survey of Student Engagement reinforce the conclusion that the average 15 hours a week that undergraduates work for money is not a cause for concern.

The ASSE is based on a questionnaire (in the pdf above), with the questions grouped for analytical purposes according to six scales: academic challenge, active learning, student and staff interactions, enriching educational experiences, supportive learning environment, and work-integrated learning.

It found that, with the exception of work-integrated learning, only those working more than 30 hours a week off campus showed lower results in the various scales. For work-integrated learning those working more than 30 hours did better. Working on-campus was consistently a benefit.

The main reason, I suspect, is that the student lifestyle typically isn’t that busy by the standards of the professional and managerial jobs most students are headed towards. The ASSE finds that more than half of students report spending less than 10 hours a week preparing for class (unfortunately this question is a a bit ambiguous – the prompt is ‘studying, writing, doing homework or lab work, analysing data, rehearsing or other activities’ – which leaves it unclear whether essays or major assignments would be included). Say 15 hours in class, 15 hours at work, and 10 preparing for class, and you have a not very stressful 40 hour week.

This is just a summary report of the ASSE. The questions asked would let us create student timetables covering paid work, class preparation, and campus activities, and compare those with self-reported grade averages. It would be a useful addition to a debate dominated by intuition and anecdote to know more about the relationships between these variables.

Young Labor joins NUS opposing price control

April 2, 2008 ~ Andrew Norton ~ 4 Comments

While Liberal students search out biased academics, it is good to see that Young Labor is joining NUS in pursuing one of the big problems in higher education, price control.

As readers may recall, NUS is supporting an increase in the maximum student contribution amount so that amenities fees can be reintroduced. In the SMH this morning, Young Labor President Sam Crosby has an op-ed calling for HECS to cover textbook expenses.

Both the NUS and Young Labor proposals are typical of the ad hocery that plagues policymaking in higher education. Endless minor changes to the existing system aimed at particular problems add to complexity without fixing the underlying structural flaws. But they are at least recognising that price control creates problems and calling for change, albeit change that does not go nearly far enough.

What’s really going on is this. For political reasons, the maximum student contribution amount is set too low. As this Access Economics report on six universities (pdf) found last year, these universities are already losing money on Commonwealth-supported students in half of the 22 disciplines examined. This means that there is no scope for bundling – whether that is non-academic services or textbooks and other study aids.
Continue reading “Young Labor joins NUS opposing price control” →

Education, not indoctrination?

April 1, 2008 ~ Andrew Norton ~ 41 Comments

Not sexist! Not racist! Don’t tell Lot’s Wife!

Back in the 1980s, it was left-wing students who used to complain about lecturers expressing inappropriate political views. Due to an attack on him in the Monash student newspaper Lot’s Wife, my criminal law lecturer, the late Kumar Amarasekara, had to preface his often hilarious jokes with the above disclaimer.

As the SMH reported this morning, now it is the turn of Liberal students to complain about political bias. According to their ‘Education. Not Indoctrination.’ campaign they want (getting in on the fashionable language) ‘inclusive’ universities that ‘foster intellectual diversity’. Incidents of bias could include:

* a verbal opinion offered by a teacher or lecturer that is overtly political or ideological
* a method of teaching that is hostile to opposing views
* the use or presentation of one-sided course materials or textbooks
* the promotion of a particular political ideology by university authorities

Continue reading “Education, not indoctrination?” →

More self-serving arguments against HECS

March 24, 2008 ~ Andrew Norton ~ 11 Comments

The National Union of Students had a flop last week with a very poorly attended ‘national day of action’. But they showed smarter tactics in peddling this story to The Age for a slow news Easter Monday.

The story opened this way:

THE Federal Government is under growing pressure to revamp the Higher Education Contribution Scheme, as students seize on research suggesting it could contribute to reduced home ownership, low fertility rates and tax evasion.

None of this ‘research’ should trouble the federal government, or anyone else, at all.

I’ve not seen any statistical evidence showing that graduates are suffering particularly in the housing market. Less than two weeks ago the papers were reporting research that despite high housing prices more young Australians were embarking on home ownership than in the past. I can’t find the paper on which that claim was based, and I am sceptical about whether it is true in absolute terms. But certainly earlier research found (pdf) that once you control for other factors affecting the time of house purchases, such as marriage and children, there hasn’t been a reduction in home ownership among the young (though the increases in house prices in the last few years should put a question mark over whether that would continue to be true in the future).

Regardless of the precise trends, though, as I argued last year there is no case for graduates getting a special first home owners grant. Effectively what NUS is saying is that even though graduates earn more on average than non-graduates, they should get an additional goverment subsidy so that they can further bid out of the market other Australians who did not go to university. Though Kevin Rudd has made the home ownership point himself, I would hope that on thinking more carefully a social democratic government would reject such a regressive policy.

On fertility, The Age says:

Continue reading “More self-serving arguments against HECS” →