Higher education inequality: how much does performance at university differ by socioeconomic status?

In an earlier post, I argued that the Australian higher education system probably deserved about a 7/10 for equity of access. In line with some theory, the middle-class meritocracy continues to reproduce itself successfully, but the universities are open to talent: for a given ATAR, university participation rates are very similar across SES groups. But what happens when students arrive at university?

Intriguingly, many studies have found that low SES students or students from non-selective government schools do not do worse and indeed tend to get slightly higher marks, for a given ATAR starting point (eg here, here, and here and the literature cited within).

Various theories for this finding have been offered, but I suspect it is because the schools higher-SES students attend maximise ATARs through intense coaching and social pressure, but their less motivated and organised students don’t do as well in the much less structured university environment. By contrast, a lower-SES student who has done well in Year 12, quite possibly with much less school and social support than higher-SES students, is a motivated and resourceful person, and that pays off at university as well.

Student satisfaction is not reported directly by SES, but recent surveys differentiate between people who are first in family and those who are not. This gives much less nuance than I would like, but low SES students are much more likely to be first in family than high SES students. The Student Experience Survey finds first in family students are often slightly more satisfied with their educational experience than students who are not first in family. Maybe first in family student expectations are different, but generally they seem to be experiencing university in much the same ways as other students.

However, on actually completing a degree we do find some negative differences. Using a geographic measure, 69 per cent of commencing low SES undergraduates complete a degree within the nine years to 2015, compared to 78 per cent of high SES students. Read More »

How bad is student mental health?

The media this morning is reporting some dramatic figures on student mental health. According to Headspace, a youth mental health organisation, two-thirds of students responding to an NUS survey reported high or very high psychological distress over the last twelve months, and a third experienced thoughts of self-harm or suicide.

I’ve recently been doing some reading on this subject, as part of a project on student attrition. I’m convinced there is a problem, but I am not so sure that it is this bad.

The latest ABS National Health Survey from 2014-15 shows that the main student demographic, those aged 18-24, has worse mental health than any other age group. This is only moderately so for men, with 11 per cent reporting high or very high psychological distress on the Kessler scale, compared to 10 per cent for all adult men. But it is dramatically so for women, with 20 per cent reporting high or very high psychological distress, compared to 13.5 per for all adult women.

According to other ABS sources, about half of 18-24 year olds are students. An analysis of an earlier NHS (along with HILDA) found small overall differences between students and non-students, especially after adjusting for demographics, with students being on average younger and more likely to be female than the general population. The NHS survey found 10 per cent of its student sample were experiencing high psychological stress, while it was 21 per cent in HILDA.

One important reason for different results is that the ABS surveys and HILDA ask about mental health issues over the last month, while the Headspace/NUS survey asks about the last twelve months. Mental health issues tend to be episodic, so we should expect more people to experience one over a year than a month. There seem to be widely varying results even from surveys with similar methodologies, so mental health is clearly something that is difficult to measure at a population level. But Headspace/NUS getting triple the rate of the ABS or HILDA seems high. They have not published their detailed results, so perhaps we will have a better idea of why when they do.

Some first thoughts on Labor’s higher education policy

Labor has released its higher education policy today. Some first thoughts:

The sensible

* They want to build on the new QILT website (itself a big improvement on MyUniversity) to provide better information to students and parents in making informed choices. It’s not in Labor’s policy, but I would suggest that there are two big information gaps for prospective students at the moment. For QILT, the units of analysis are the course and the university. However, as the attrition rates reported elsewhere in Labor’s policy imply the more important unit of analysis may be the prospective student – ie, student attributes matter more than university or course attributes in predicting completion. The other issue is that while prospective students are getting improved information about choices within higher education and vocational education (see the MySkills website), there is not much on the choice between higher education and vocational education. But that’s the choice people with weaker academic backgrounds need to be considering.

* They would keep the demand driven system. Previous talk of using compacts as a backdoor way of steering the supply side of the demand driven system is absent from this document, and if it has been dropped I think that is a good thing.

* There would be better processes: a green and white paper to sort out the detail of their policy once in government. They are also proposing a Higher Education Productivity and Performance Commission. The main discussion about the Commission is on labour market forecasting, but there is much else it could do to meet the goals implied by its title.

The neutral

* They are promising a ‘Student Funding Guarantee’, which they say will boost per student funding by $2,500 ‘compared with the Liberals’ plan’. Perhaps compared to the 2014 Budget policy, but not so far as I can see compared to the status quo, which is the most likely outcome under the Liberals as well, even if they would rather spend less. Just indexing the current average per student funding rate by 2.5% a year I get quite similar projections to Labor. Incidentally, 2.5% is less than universities would like, but in recent times weak wage growth means that the indexation system Labor introduced last time they were in office is not producing the increases in grants that universities thought it would.

Incidentally, the wording in the document is not always as careful as it could be, blurring the distinctions between per student funding and per student government funding. Universities won’t be 40 per cent better off per student each year under Labor; without spending cuts or fee deregulation it is just that more of their money will come from government. The accountability pressures may differ slightly depending on whether the government or students pay, but a dollar is a dollar regardless of where it comes from. Apart from ideological considerations around public-private funding shares, so far as I can see universities will be financially indifferent between Labor in 2018 and the status quo (which is just Labor policy as of 2012).

The not so good

* Labor’s plan to write off the HELP debt of 100,000 STEM graduates was controversial when it was announced in May. As I said at the time, it is at best wasteful and at worst will encourage prospective students to take high employment risk courses. The Higher Education Productivity and Performance Commission will be able to identify the problems.

* They will not implement the Kemp-Norton report recommendation to extend the demand driven system to non-university providers or sub-bachelor degrees. However, they will announce further policies regarding the TAFE system and pathway programs prior to the election.

Does attending a prestige research university reduce earnings?

The latest HILDA statistical report has a finding that the AFR says:

threatens to undermine the prevailing view that it’s worthwhile for students sweat out a high ATAR score in year 12 so they make it into one of the elite Group of Eight universities.

What the report says is that Group of Eight graduates in their sample earn less than graduates who went to universities in the Australian Technology Network or Innovative Research Universities groups.

In my view the finding is not so much wrong as misleading. We did similar research at Grattan last year, using the same HILDA data source. We found a salary premium for the Group of Eight and Australian Technology Network universities of about 6 per cent, after controlling for various personal attributes and, most importantly, discipline.

I believe that the main reason the HILDA report is getting its result is that Group of Eight universities have enrolment skews towards relatively low paid disciplines such as arts and to a lesser extent science. As can be seen in the chart below, these tend to have lifetime earnings in the lower half of the income distribution.

earningsJPG
Source: Grattan analysis of ABS Census 2011 data. It shows the median lifetime private financial benefit of holding a bachelor degree in the stated discipline, compared to the median person of the same gender who finished their education at Year 12.

Just taking 2013 completions, 31 per cent of Group of Eight completions were in the ‘society and culture’ field that includes humanities compared to 23 per cent of IRU graduates and 14.5% of ATN graduates. For science, this field includes 16 per cent of Group of Eight graduates but only 8 per cent of IRU and 6 per cent of ATN graduates.

All this said, past research that does control for discipline has consistently found that the financial advantage of attending a Group of Eight university is less than we might expect, given their relatively high prestige. Despite some anecdotal evidence to the contrary, employers of new graduates don’t seem to pay a Group of Eight salary premium. And Grattan’s work using HILDA data found only a fairly small advantage in the long run. As we did not control for prior ability, even that small advantage might be over-stated due to partly reflecting the higher prior academic ability, as measured by school results, of the students who attend Group of Eight universities.

If a prospective student wants to maximise their income, the key advice is that what they study matters more than where they study it.

But for Group of Eight universities to come out worse in the long run on a discipline basis they would have to be doing significantly worse in adding human capital during their courses, bad enough to cancel out the positive effects of higher prior ability and whatever proxy value their brands have in the labour market. That seems pretty unlikely. I think if the analysis was done again including discipline we’d see a finding more consistent with theory and past research: a small Group of Eight advantage.

The science bubble finally shows signs of deflating

Since 2009, demand for science courses has been growing strongly. This is leading to a serious labour market over-supply, and so I believe there needs to be a correction. Unfortunately the information flows to prospective students for science contain a lot of misleading signals from STEM boosters, who persist in high-profile, but in my view incorrect, claims that this area of education needs encouragement.

The February 2015 applications statistics show some tentative signs that the market is adjusting to science realities. Through the tertiary admissions centres, there has been a 3 per cent decline in science applications. In reality, it is probably a larger drop than this, as I understand that a course reclassification that led to a big drop in environmental studies applications should have boosted science. Against this trend, however, there has been a 5 per cent increase in direct applications for science courses (for non-Year 12 applicants, there is a trend towards applying directly rather than through tertiary admission centres).

Feb demand

The biggest drop in demand if we don’t consider the environmental studies reclassification has been for education courses, down 9 per cent through tertiary admissions centres. This is probably because with a clear occupational outcome in teaching negative labour market information is transmitted much more effectively. Although this is a sensible adjustment, Kim Carr will still be on the warpath about nearly 900 education course offers to applicants with ATARs below 50.

Total applicants (as opposed to applications) are up 1 per on 2014, indicating a market that is essentially stable.

IT, engineering and economics students least satisfied with teaching quality

Yesterday I reported data from the 2014 University Experience Survey suggested that students at non-university higher education providers were, on most indicators, more satisfied with their education than students at universities.

There are also significant differences between disciplines on satisfaction with teaching quality, as seen in the chart below. I have taken out disciplines with fewer than 1,000 respondents in the UES, as well as most ‘other’ disciplinary categories as too vague. This took out both the discipline with the highest satisfaction (language and literature, 89%) and with the lowest (mechanical engineering, 72%).

satisfaction by discipline

Most of the relatively low-satisfaction disciplines are popular with males and international students, who report lower overall satisfaction than females and domestic students. But I can’t tell on the available data which way the causation might be running – whether students in engineering, IT and commerce faculties are less satisfied at least partly because they tend to be male and/or from overseas, or because males and international students are less satisfied because they are enrolled in engineering, IT and commerce faculties.

Non-uni higher education provider students more satisfied than uni students

The 2014 University Experience Survey results have been released in the last few days, and this time they included students from non-university higher education providers (NUHEPs). A total of 1,444 students from 15 NUHEPs completed a survey. Given that there are about 130 NUHEPs the results aren’t conclusive, but they are interesting.

As can be seen in the chart below, NUHEP students were generally more satisfied with their educational experience than university students. Each of the categories includes multiple related questions that are combined to produce an overall satisfaction rate. For example, the teaching quality scale contains questions on whether teachers explained things clearly, gave helpful comments on work, whether assessment tasks challenged students to learn, and other similar topics.

NUHEP satisfy

The area where university students are more satisfied than NUHEP students is ‘learning resources’ which includes questions about the quality of teaching spaces, library facilities, online learning materials, the quality of student spaces and common areas, and related topics. Possibly the big university campuses with their economies of scale are better on these things.

The positive responses on ‘learner engagement’ are noticeably lower for both groups. For example, only 53 per cent of students said they had a sense of belonging to their university. The recent first year experience survey picked up a negative trend in this area.

Although there is room for improvement in some areas, for most questions responses were more positive in 2014 than 2013. That supports the conclusion of the end-of-degree course experience questionnaire (trend data at p.76 of Mapping Australian higher education) that teaching quality in Australian universities is slowly but steadily improving.