Next week I am a panelist in a discussion on whether Australia has an equitable tertiary education system. The promotional blurb says:
Australians believe we live in a fair and egalitarian country. We believe in a fair go: in equality of opportunity. We also believe that accessible education and training is a fundamental right and it facilitates prosperity, social mobility and a richer and more engaged economy.
Are these beliefs about who we are based in fact? While access to higher education has increased dramatically over the past 30 years, income and wealth inequality is also on the rise. This seeming contradiction challenges our most fundamental beliefs about intergenerational mobility. Is the education system a cure or a curse? …
When I accepted the invitation to be on the panel I told the organisers that I did not know the answers to their questions, but I could offer some observations. I am going to try a few of them out on this blog.
Starting theoretically, I think social mobility and income inequality are distinct issues. It was always more plausible that education would promote mobility in personal status than that it would reduce snapshot-in-time income inequality figures. Indeed, there are reasons for thinking that higher education is more likely to increase than decrease income inequality.
Higher education can increase individual income inequality by facilitating a more unequal labour market. Higher education provides the training to support an increasing number of highly-skilled and highly-paid professionals. In a 2017 paper, Jeff Borland and Michael Coelli have some interesting charts showing growth in demand for the kinds of cognitive skills that a university education aspires to teach. Consistent with this, numerous papers have shown substantial financial ‘returns’ to higher education. This Deloitte report from last year summarises some of the local literature and adds its own estimates.
Individual income inequality translates into even greater household income inequality via graduates partnering with each other. I haven’t found any recent Australian statistics on this subject, but it is hard to think of any reason why this would not be a factor here.
Aside from the purely financial implications of getting a degree, higher education creates its own status system that converts intelligence and academic effort into prestige. We have created an official hierarchy of qualifications, with degrees at the top. Universities are ranked by age, ATAR, and research; the three tend to be linked and reinforce each other. A less formal hierarchy of disciplines also converts ATAR into prestige; it is more impressive to study medicine than nursing or law than arts.
Higher education also increases occupational prestige; as with qualifications this is reflected in the way jobs are classified. It makes professions harder to get into and more exclusive. Over the twentieth century, many jobs that were once open to people without a university education came to require a bachelor degree. Now some professions want a masters degree.
At least in theory, there was more potential for higher education to promote social mobility than equality of outcomes. The cognitive and personality attributes that higher education can convert into money and prestige are found across the socioeconomic spectrum. Similarly, a lack of these attributes is found across the socioeconomic spectrum.
At least in principle, it is possible to create educational institutions that will push smart and hard-working people from lower-class backgrounds up the socioeconomic spectrum, and make it harder for dumb and lazy people from upper-class backgrounds to maintain their social position. So while there will still be a lot of inequality in society at any given point in time, it will be fluid over longer periods of time, with people moving up and down between generations.
In theory, too, other trends in society could help promote social mobility. Merit-based entry to universities, occupations and firms reduced the power of existing family and class networks to put their children and friends into high positions, regardless of whether they were the best person for the role, or were even competent.
Education-driven social mobility does occur in every Western society. But this meritocracy has long had powerful critics, beginning 60 years ago with Michael Young’s famous book on the topic.
One of meritocracy’s problems, from an equality perspective, is that even though the attributes needed for educational success are found across the socioeconomic spectrum, they are skewed towards its upper end. Families with high levels of education are very good at passing the attributes for success on to the next generation. The danger is that meritocracy will end up being nearly as hereditary as aristocracy. Meritocracy’s critics argue that it can be even worse than aristocracy, because meritocrats believe that they truly deserve their position in a way that aristocrats do not. They hold the positions they do based on ‘merit’, as defined by qualifications and marks, and not directly on their family connections.
Mass higher education also creates the problem of ‘credentialism’, of employers preferring or requiring degrees for jobs that don’t need the skills taught at university. This blocks social mobility paths for people who lack credentials but could have learned on the job.
Overall, then, higher education can easily increase and entrench inequality on various dimensions. That inequality hasn’t gone down in the mass higher education era is not surprising. In subsequent posts I will not assess Australian higher education against a standard that was never likely to be realistic. Rather, I will assess its outcomes in the context of the substantial inequality risks inherent in higher education.