Andrew Leigh

RICHEST 10PC THREE TO FIVE TIMES MORE LIKELY TO ATTEND UNIVERSITY

The Australian Financial Review, 6 December 2021 

Few investments have so large an economic payoff as attending university. According to the OECD, Australians with a bachelor’s degree earn 26 per cent more than workers who have only finished high school (the average wage premium for a diploma is 9 per cent).

Yet the benefits of university are not evenly spread across the population. In the United States, one study found that children whose parents are in the top 1 per cent of the income distribution are 77 times more likely to attend an Ivy League college than those whose parents are in the poorest fifth of the population.

Curious to see how this plays out in Australia, I crunched the numbers for a study that recently appeared in the Australian Economic Review.

First, I started by looking at the most common measure of socioeconomic status, which is based on the Census characteristics in the neighbourhood where the student last lived. Although the areas are quite small (averaging around 400 people), they’re far from a perfect metric of socioeconomic status. Neighbourhood averages will make the poorest family on the street look better off than they really are.

Flawed as they are, the neighbourhood data tell us that the most advantaged tenth of students are almost three times as likely to attend university than students from the most disadvantaged tenth of the population. The numbers show that Australia failed to meet the target proposed in the 2008 Bradley Review: that by 2020 one-fifth of enrolments should be from low socioeconomic backgrounds.

A second way to check the socioeconomic status of university students is to use survey data from the Household, Income and Labour Dynamics in Australia survey. The upside of this approach is that it provides detailed data on parental wealth. The downside is that it is only a sample. Using an individual measure of socioeconomic status reveals that the disparities are even more extreme, with the most advantaged tenth of students almost five times as likely to attend university than students from the most disadvantaged tenth of the population.

Neither metric is perfect, but just as doctors use multiple tests to diagnose patients, it’s insightful to see where they point in the same direction. A handful of universities stand out as attracting a larger-than-average share of disadvantaged students. The twelve best ‘mobility engines’ are Charles Darwin University, Federation University, Murdoch University, University of South Australia, University of Southern Queensland, University of Newcastle, La Trobe University, Griffith University, University of Tasmania, Charles Sturt University, Flinders University and Western Sydney University. Either because of their location, course offerings or policies, these institutions are unusually successful in attracting disadvantaged students.

On the other end of the spectrum, nine universities have an atypically low share of disadvantaged students. These are Bond University, the University of New South Wales, the University of Notre Dame Australia, the University of Technology Sydney, Deakin University, the Australian Catholic University, Monash University, Queensland University of Technology and the University of Sydney. I’m yet to meet a university leader who doesn’t want to increase their share of disadvantaged students, and perhaps there are lessons these institutions can learn from the twelve best.

For centuries, universities were the exclusive preserve of the elite. The result was that society failed to nurture the talents of brilliant young people who grew up in poor households. Getting the engine of mobility going again means properly funding universities, which have been decimated by the withdrawal of international students and a federal government whose policies have been overtly hostile to higher education.

It’s time we did a better job of measuring disadvantage, replacing neighbourhood measures with metrics that accurately capture the socioeconomic status of individual students. In an era of big data, it doesn’t help to be looking at the problem through a fuzzy lens.

Universities should be experimenting more with programs to attract and retain low-income students. The global evidence suggests some promising approaches, but rigorous evaluations – ideally through randomised trials – would help us learn what is optimal for Australia.

Finally, not everything is about universities. High schools that serve disadvantaged students have teachers who are less experienced, less appropriately trained, worse prepared and more likely to be absent. This is hardly a recipe for building opportunity.

Andrew Leigh is the Shadow Assistant Minister for Treasury and a former Professor of Economics at the Australian National University.

ENDS

Authorised by Paul Erickson, ALP, Canberra