Do we have too many science students?

An article in this morning’s Australian reports complains that, at some universities, the cut-off score for a course in Chinese medicine is higher than for a traditional ‘Western’ science degree. This has Education Minister Julie Bishop suggesting that we need to encourage more students to study science ‘to ensure the future needs of the nation are met’ and International Organisation for Science and Technology Education chairman Dr Terry Lyons worrying that ‘low levels made science even less attractive to students’.

Demand for science courses does seemed to have declined over time, though it is hard to say by exactly how much, since IT courses were classified under science in applications data before 2001. But adding together science and IT, numbers were higher in the 1990s than now. As a share of total applications science itself been fairly steady since then, with 6.79% in 2001 and 6.53% in 2006. But Dr Lyons seems to be wrong about low cut-off scores deterring good students. As the AVCC’s analysis of applications data shows, science attracted 10.9% of students with ENTER scores of 90 or above. Students are driven more by their interests than the status obsessions that afflict academics.

Though applications are holding up, science is one of the few disciplines in which first-preference demand is consistently below supply. Given there are other disciplines in which supply is significantly short of demand and which lead to professions with labour market shortages it would seem sensible to move places from science into other disciplines. But would this threaten, as Bishop worries, the ‘future needs of the nation being met’?

The answer to that is almost certainly no. Except in low-paid professions like teaching, there is no evidence of shortages in scientifically qualified personnel. Unlike several other graduate occupations, they don’t appear in skills shortages lists and science graduates in some fields have more difficulty than other graduates in finding full-time work. And with over 8,000 people enrolled in science PhDs there are plenty of potential researchers working their way through the system.

Rather than worrying about hypothetical shortages of scientists in the future, we should be more worried about existing shortages in a wide range of health-related fields. If the normal pressures of supply and demand had been allowed to operate, the system would have re-balanced itself years ago – solving, along the way, the ‘problem’ of low ENTER scores for science courses. But as centrally controlled systems are prone to doing, we are producing too much of things people don’t want and too little of what they do want.

Contrasting takes on how much the government contributes to uni costs

The data from Figure 4.1 reveal that there has been a radical change in the nature of funding, particularly from 1987 to 2000. … the increase in revenue coming from students, which went from just a couple of per cent to about 25 per cent.

Bruce Chapman, Government Managing Risk, Routledge, London & New York, 2006, p.55.

Bruce Chapman, who developed the original scheme for the Hawke-Keating government, yesterday disputed the Howard Government’s claims that students are paying only about 25 per cent of the cost of a degree. …
“Does it stop people going to university? The answer to that seems to be no. But the next question is how much should students pay compared to taxpayers. We’re now at a level of about 45 per cent of the recurrent cost. I think the case for making that higher is very weak.”

Bruce Chapman, The Australian, 29 December 2006.

Ok, he’s not being completely inconsistent. The book – in an annoying feature of academic publishing – uses old data and the same basis for assessing the student contribution as the government, looking at what percentage of the whole university enterprise students pay for and not just the teaching component.

On my calculations, Chapman as reported this morning is right on the student contribution to the nominal cost of their tuition (ie, ignoring the cross-subsidy from fee-paying students), though if we allowed for likely bad debt it goes down to 38%. But in a debate where no data or fudged data are the norm, Bruce shouldn’t be surprised if his own words are quoted back at him.

Supply does not equal demand in higher ed

According to an article in The Australian this morning on increased first year university enrolments:

AUSTRALIANS are turning to university in an effort to improve their career prospects, reversing a trend of school-leavers taking advantage of record low unemployment and the resources boom to land full-time jobs.
The latest commonwealth figures reveal a 6 per cent jump in first-year enrolments for Australian undergraduates last year,…
Part of the boost can be attributed to extra places being created as a result of measures by the Howard Government. …

Chief executive of the Australian Vice-Chancellors Committee John Mullarvey said the latest enrolment figures were “very positive”.

“It shows that demand (for university) is still high despite the economy booming,” he said.

Note the wobble between demand-based explanations (Mullarvey/journalist Dorothy Illing’s analysis) and supply-based explanations (extra places available). In market-based industries, this distinction may not be that important, since suppliers generally work to keep supply as closely aligned to demand as possible. But in higher education, where though trending downward most students are still enrolled under a centrally allocated system, the distinction between supply and demand is crucial.

Without proper price signals, in higher education overall demand always exceeds overall supply (because the low price encourages demand and discourages supply). So the increase in places noted in the article, plus the new private higher education providers taking extra students thanks to FEE-HELP loans, reduced excess demand.

But we can’t infer from this that there has been any reversal of a trend toward school leavers preferring to do something else, at least for a while. Between 2005 and 2006, demand as recorded by the centralised admissions agencies actually went down. Since these agencies are the main route into university for school leavers, the demand figures are consistent with school leavers continuing to prefer doing something other than study in the short term (though the initial demand figures for 2007 suggest that this trend might reverse itself slightly next year).
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Is the review of the Nelson reforms pointless?

Can a review that rules out the only possible solutions to the problems it identifies do any good? That’s the question we face with the first phase of a review of the Nelson reforms announced by the government yesterday.

This part of the review is of the ‘funding clusters’, the dozen discipline groupings that determine how much universities receive for each student place they provide. The total is a combination of the Commonwealth contribution and the student contribution.

Even within the inherent constraints of a centrally planned system this is a mess. The amounts for each cluster have their origins in the ‘relative funding model’ used in the early 1990s to equalise funding between the universities and the old Colleges of Advanced Education (now known as ‘Dawkins universities’) when the distinctions between them were abolished. This was not a costing exercise; it was an examination of historical expenditure. Each discipline was to receive a multiple of a base amount. For example, law places received the base amount, and medicine places 2.7 times that.
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The ANU spins its enrolment problems

Andrew Leigh is blogging on the Australian National University’s decision to offer school leavers with UAIs (ENTERs for people in other areas) that won’t get them into the university a separate admissions test.

The ANU is selling this ‘as a way to provide greater access and equity’. But when it comes to anything that can affect university status, such as the quality of the student intake, the first assumption ought to be that every university statement is shameless spin.

In this case, a more interesting place to start than the university’s explanation might be the NSW/ACT university application statistics (pdf). Though overall the number of applicants is up, for the ANU first-preference applications are fractionally down. That spells trouble for the ANU, because this year the ANU was about 200 places under-enrolled (less than their quota, that is). Given part-time enrolments, that would translate into more than 200 persons. If that was caused mainly by weak commencing student numbers in 2006, they have double trouble: not only do they need to make up lost numbers, but they have a ‘pipeline’ problem in that their second year cohort will be slightly smaller than they had originally planned.
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The lack of critical thinking in higher ed policy

They say that university education encourages ‘critical thinking’, but so rarely is that skill applied to university policy itself. At the weekend, Kevin Rudd returned to his anecdotes about higher education:

“We’ve got to look long and hard at how we make higher education affordable for kids from working families right across this country. I’m concerned we’re heading backwards on this, and it’s not good in terms of equity.

“We have young people and their families coming in to our electorate offices saying they don’t know if they can afford to have their kids go to university any more. This is a crying shame. The rest of the world’s investing more in education, skills and training, but public investment by the Howard Government is going backwards.”

Though demand for university places declined over the 2003-2006 period, at current prices it still exceeded aggregate supply (though some universities could not fill places, this was because the quota system of allocating places to universities does not take demand into account).

For 2007, preliminary applications centre data indicates that demand from school leavers is up by 3.8%. What is the point in trying to generate extra demand if there are too few places already? Especially if there are unlikely to be sufficient high-quality jobs at the other end.

In any case, there is no evidence – despite what people coming into Rudd’s electorate office might say – that low SES people are ‘under-represented’ at university once their ENTER scores are taken into account. The Cardak and Ryan research released this year showed that at the Year 12 to university transition point there is no evidence that anything other than ENTER score makes a difference. The problem is that low SES students get relatively weak ENTER scores.
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Too few good jobs for graduates

Three lots of graduate employment data were released this week. For recent graduates, the good news in that unemployment has dropped to 5.5%, though another 12% are in part-time or casual jobs and looking for full-time work. But for graduates overall, the ABS finds that unemployment is only 2.4%. Today’s ABS job search data shows that half of unemployed graduates have been out of work for 8 weeks or less. Just 0.4% of graduates in the labour market have been unemployed for 6 months or more.

But does this mean that Bob Birrell is right that we have too few graduates? The latest ABS graduate employment data again shows that he is wrong. Many graduates are employed in jobs that do not require degrees, such as clerical or sales jobs. Counting them and unemployed graduates together, and we have a ‘reserve’ graduate workforce of more than 460,000 people. That’s equivalent to nearly three years of university completions.
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Whitlamite nostalgia in higher education

Jenny Macklin may not survive as the ALP Shadow Education Minister, but if recent statements from the Dreaming Team are any guide, her 1970s worldview will continue to drive Labor higher education policy. Both Kevin Rudd and Julia Gillard appear to be Whitlamite nostalgists. According to Rudd, he

was inspired to improve the quality of and access to education because he was the first member of his family to attend university, largely because of the Whitlam government’s free tertiary education policies.

And in his weekend broadening of his image, he told ALP supporters that:

“it makes my heart bleed when I have young kids come into my office in Brisbane and say to me ‘I don’t think we can afford to go to uni, the HECS is to much’. I think we’ve got to a stage where that has to be turned around.”

In today’s Australian (can’t find a link, sorry, but the original text is at p.49 of yesterday’s Hansard) Julia Gillard is reported as saying, in the process of lamenting the bad job schools were doing (surely the responsibility of Labor state governments?), that

“…courtesy of the Whitlam government, I then went to university and obtained two degrees. I fear that it is harder today for a girl from a working class background to make that journey than when I was young.”

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University students in Australia over 40 years

For the last few weeks I’ve been helping to prepare a speech on Australian higher education policy over the last 40 years (for Adelaide readers, you can hear Glyn Davis give it on Thursday, for others the final version will be published in Australian Book Review). As my memories of the 1960s consist largely of Humphrey B Bear and the milk bottles with yucky cream under the lid they made us drink in kindergarten, I had to do some historical reading.

I knew the broad outline, but the detail can still surprise. Even in 1970, an author writing on ‘access to higher education’ could start a sentence with ‘In an ethnically homogenous society like Australia…’. No essay written on Australian universities today could contain the phrase ‘ethnically homogenous’.

As the student statistics released last week record, 239,495 of the 957,176 people enrolled at Australian universities are overseas students. To these can be added 163,820 domestic students who were born overseas. Between them, they make up 42% of all students at Australian universities.

Previous, though now rather dated, research found that the Australian-born children of migrants were more likely to attend university than 3rd or more generation Australians. We’ll have to wait for the 2006 census results to confirm that this is still true, but given the selection effect (ie, the people who are ambitious for their offspring are more likely to migrate) I’d be very surprised if it was not.

Given that, and a large migration programme favouring people with higher education qualifications (who are likely to pass that preference to their kids), it won’t be long, if it hasn’t happened already, before 3rd or more generation Australians make up a minority of university enrolments.
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What is happening in undergraduate enrolments #2?

More than a month ago, based on university financial statistics, I predicted that:

Commonwealth-supported undergraduate enrolments actually went down for the third year in a row, and all the growth was generated in the full-fee market.

The student statistics have now been released. These were very hard to analyse, because DEST has changed the way the data is presented, and added in the new private providers.

A declining number of Commonwealth-supported students was one reason why revenue growth for them was low, but I wrongly thought undergraduate numbers were to blame. In full-time equivalent numbers (eg two half-time students would be counted as one full-time equivalent) undergraduates increased by 235. But with postgraduate Commonwealth-supported places down by 760, there was a net decline overall of 525 or 0.13%.

I was right however that the stronger growth was in the full-fee domestic undergraduate market, up by 34.1%. However, most of the increase was due to enrolments in the private higher education providers whose students are now entitled to a FEE-HELP loan. Take them out of the calculation and the growth rate drops back to 7.42%. In the fee-paying postgraduate coursework market things were very tight despite the extension of FEE-HELP, only a 1.26% increase in places overall and .22% on a same institution basis.

The overall picture is of stable enrolments, with FEE-HELP providing an additional element of choice outside the quota system for Commonwealth-supported places.