The Grattan Institute has released its Mapping Australian Higher Education Report 2018, which notes that the premium from gaining a university degree has been eroded, dragged down by strong skilled migration and the explosion in student numbers:
In higher education, the easing of funding caps led to surging student enrolments between 2009 and 2015 (Section 2.3). This, combined with a migration program skewed towards skills, means the Australian population is much more educated than it was even a decade ago (Section 9.1 on page 71). Many more people are chasing the jobs that graduates aspire to hold…
More broadly, growth in professional jobs in Australia did not keep up with the growing number of graduates over the decade, and recent graduates are getting less financial benefit from their degrees than earlier graduates at the same point in their careers.
In early 2017, 28 per cent of recent graduates who were looking for full-time work were yet to find it four months from completion, up from 15 per cent in early 2008, before the global financial crisis…
As time passes after graduation, employment levels rise. Three years after finishing their course, 11 per cent of bachelor-degree graduates who want full-time employment do not have it (Figure 10.2). This is worse than the three-year outcomes for pre-2009 graduates…
Former international students are less likely to be working full-time than domestic graduates…
Earnings either grew weakly or declined over the past decade for early-career graduates from all disciplines except education, nursing and medicine…
This is exactly what MB has been arguing for years: that the explosion in student numbers has eroded the value of having a university degree, whereas the constant flood of ‘skilled’ migrants has undermined the pay of younger Australians.
Data from the Australian Treasury shows similar results, with university graduates experiencing the lowest wages growth between 2010 and 2015:
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness.
Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.
