Financial influences on job-seeking university applicants

In an earlier post, I argued that student interests drive course choices, but also that more than 80 per cent of first-year students hope for improved employment outcomes.

It follows from this that, within their cluster of interests, prospective students would plausibly choose courses with the best apparent employment and income outcomes.

This theory helps explain trends seen in applications data. While supply-side and timing problems mean we do not always have enough ‘job-ready graduates’, rarely do we lack ‘job-ready applicants’.

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Jobs, interests and student course choices

The Tehan higher education reforms aim for ‘job ready graduates’. In that, the government’s goals align with those of most students. In recent ABS surveys asking students about their main reason for study, more than 80 per cent of bachelor-degree respondents gave a job-related reason. About 10 per cent gave interest or enjoyment as their main reason (chart below).

However, interest and work reasons are not mutually exclusive. When multiple reasons can be given interest in the field of study is the most popular answer, with over 90 per cent of respondents saying it is important (chart below). Training for a specific job is nominated by about three-quarters of respondents, with another ten per cent hoping to improve their job prospects without having a precise occupation in mind.

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Why did universities become reliant on international students? Part 4: Trying to maintain a teaching-research academic workforce

In my previous post in this series, I argued that international student fees help pay for under-funded government-sponsored research grants. But these research projects are not the only partially-funded research universities are trying to finance. They also have many teaching staff on contracts that include research time, but who do not attract equivalent research income.

For academics, the expected and preferred academic career is generally to have a teaching and research or research only role. For most academics, however, teaching is not their top priority. A survey about a decade ago found that, among teaching-research academics, nearly two-thirds leaned towards or were primarily interested in research.

This bias is reinforced by the academic recruitment process, which favours people with PhDs. In 1987 less than a quarter of academics in the Colleges of Advanced Education, which by then taught the majority of higher education students, had PhDs, and 69 per cent of university academics. In 2018, across the now unified system, nearly 74 per cent of academics have a PhD.

Not surprisingly, most people who do PhDs are interested in research. In a 2010 survey, only six per cent of research students planning an academic career nominated a ‘mainly teaching’ role as their ideal job.

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Should ‘undergraduate certificates’ be added permanently to the AQF?

As of this morning eight universities are offering 43 ‘undergraduate certificates’ in the government’s university short courses program. Last week I outlined the then multiple legal and funding difficulties of ‘undergraduate certificates’.

But as I was writing that blog post a band aid legal fix was being applied. Undergraduate certificates have been temporarily added to the Australian Qualifications Framework. They can be awarded between this month and December 2021. This gets universities, and the Department, which otherwise lacked legal authority to pay Commonwealth Grant Scheme or HELP money to universities, off the legal hook.

Apart from highlighting AQF governance weaknesses  – it is just an agreement between education ministers – this leaves the question of what happens to undergraduate certificates after December 2021.

The links between short courses and qualifications

In answering this question we are not starting with a blank sheet of paper. The AQF recently had a major review, which reported in October last year. The review was sympathetic, as I am in general, to helping students build towards a credential. Students don’t necessarily want or need a formal qualification, but where they do we should, where we can do so efficiently with low integrity risks, help them achieve their goal incrementally and cost effectively.Read More »

International students and the COVID-19 recession

For Australian higher education the situation of international students in the COVID-19 crisis is especially concerning. They lack the local family and social security back-ups of domestic students. It leaves them particularly vulnerable as large parts of the student labour market collapse.

And if international students have to go home or cannot pay their fees, that is the most likely trigger for a broader higher education sector crisis. At best, thousands of higher education workers will lose their jobs. At worst, many universities will need government intervention to survive.

This morning the government issued a summary statement on the situation of international students during the COVID-19 disruption.

International students working in nursing and aged care have had their 40 hour per fortnight cap on working eased, as have students working in supermarkets until 1 May. While that is helpful for some students, as of 2016 the majority work in other occupations, as the chart below shows. Read More »

COVID-19 means that universities should not be held to performance funding targets

Update 6/4/20: Since this post was written, the minister has indicated that performance funding is being reconsidered due to COVID-19.

The government’s university performance funding scheme was always based on  questionable assumptions. Among them is the belief that we can reliably distinguish a university’s contribution to various outcome indicators from the other influences on those same numbers.

I’m sceptical enough of this in normal times. But COVID-19 means that, despite the extraordinary efforts of academics and other university staff to provide continuity of education and student support, three of the four performance indicators – graduate employment, student satisfaction, and equity group enrolment share – will or are likely to worsen compared to recent years. The fourth – attrition – will probably show a positive trend that also has little to do with university performance.

Due to the total amount of performance funding being linked to population growth, COVID-19 driven changes to migration levels will also reduce how much performance money is on offer.

Graduate employment

Let’s start with graduate employment, which has a 40 per cent weighting in the performance funding formula. As I argued in a blog post on Monday, previous record-bad employment results in 2014 will be significantly exceeded. Read More »

Will university staff receive the JobKeeper payment?

Update 9/4/20: Since this post was written there was, briefly, some expectation that the revenue loss required for universities would be lower for 15 per cent. That is not happening. 

Update 24/4/20: This story keeps evolving. Due to a loophole in the legislative instrument, which sets the revenue base at GST turnover rather than total income, some universities look like they have a basis for receiving JobKeeper.

Update 25/4/20: Cancel yesterday’s update, the government is moving to block that one. But there may still be other ways that universities can get JobKeeper. A new post updates the story.


Last night there was some Twitter discussion about whether university casuals would receive the new JobKeeper payment of $1,500 a fortnight. It is to be paid via employers, but casual staff are not eligible unless they have been employed on a regular basis for the last 12 months. Given the on-gain, off-again nature of casual teaching many probably would not be eligible.

But the first issue is whether universities are eligible employers. To qualify, they need to have suffered a significant loss of revenue:

Employers (including not-for-profits) will be eligible for the subsidy if:
• their business has a turnover of less than $1 billion and their turnover will be reduced by more than 30 per cent relative to a comparable period a year ago (of at least a month); or
• their business has a turnover of $1 billion or more and their turnover will be reduced by more than 50 per cent relative to a comparable period a year ago (of at least a month).  (emphasis added)

In 2018 eleven universities had annual revenues exceeding $1 billion. They therefore have the higher 50 per cent drop in revenue requirement, rather than the 30 per cent drop for smaller universities. Read More »

Graduate employment prospects during the COVID-19 recession

This post looks at the history of economic downturns and graduate employment since the early 1980s – specifically the early 1980s recession, the early 1990s recession and the end of the mining boom in 2013 – to draw out potential implications for the COVID-19 recession.

Historically, each downturn peaks at worse graduate employment outcomes than the previous one. The COVID-19 recession is likely to fit this pattern and deliver record high graduate unemployment. Not only is it likely to be the most severe recession in living memory, but it has already caused massive job losses in industries that are significant graduate employers.

Past recessions

Thanks to old graduate destination survey reports being put online (scroll down here),  the employment effects of past recessions are easier to examine. The early 1980s recession triggered a four percentage point increase, on the best recent outcome in 1980, in university graduates still looking for full-time work four months after completion. But the negative effects were short-lived. By the mid-1980s employment outcomes were better than they had been in the late 1970s (chart below). Graduates of Colleges of Advanced Education had higher proportions looking for full-time work, but this appears to be mostly due to trends that started before the recession. Their results also recovered quickly.

1980s recessions

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Will the COVID-19 recession increase mature-age applications for higher education?

In an earlier post, I looked at how the COVID-19 recession might affect school-leaver applications for undergraduate education. I concluded that although the lack of job opportunities would favour continued education over unemployment, the scope for applications growth was lower now than during the early 1990s recession.

School retention is much higher now than 30 years ago, and a much larger proportion of the cohort with a potential interest in university already attends. With the age cohort’s size not changing much in the short term there is less room to move.

Interpreting historical application numbers from older university applicants is complicated. It includes relatively young people, did not until the last decade count direct applications to universities (which are mostly from older applicants), and does not distinguish between applicants who are already students but hoping to change courses and those seeking to enter higher education.

With these caveats, the chart below shows a large increase in applications from non-school leavers in the early 1990s. In percentage terms it is larger than the school leaver increase. It is consistent with the recessions drive up higher education demand hypothesis. The scope for growth is high because it is not constrained by the size of recent Year 12 classes.Read More »

Will the COVID-19 recession increase school-leaver applications for higher education?

Due to COVID-19 Australia faces the worst recession in living memory. This post is the first of a series looking at how this might influence demand for higher education. But to pre-empt future posts, applications are just one of several factors affecting how many students end up enrolled. Acceptance rates, deferrals, and attrition rates could all change, affecting student numbers.

I will start with the school leaver market. As I have noted previously, in recent years higher education applicant numbers have softened. For school leavers, demography will continue to cap numbers. But within the constraints of age cohort size, could the recession affect applicant numbers?

Recessions change the economics of choosing between higher education and work. If there are no jobs a university student does not forgo pay and work experience. Higher education’s opportunity cost falls. Further study might be the second-best option, but it is better than unemployment.Read More »