How Universities Improve Society (And Your Salary)

How Universities Improve Society (And Your Salary)

Tertiary education graduates across the OECD earn on average 70% more than the non-tertiary educated, meaning despite rising costs of higher education in Australia the investment is still worthwhile.

University picture from Shutterstock

The OECD’s annual Education: at a glance report found tertiary graduates earned more and had lower unemployment rates.

80% of tertiary education graduates were employed, compared to 60% with below upper secondary education on average across the OECD.

However the benefits weren’t only for the individual, the public received a positive return on investment through taxes and social contributions, according to the report.

The public net return on investment was on average over $US105,000 per tertiary educated man, about three times the level of average public investment, and $60,000 for women.

The individual return on investment was lower in Australia than the OECD average however, with the net present value of a degree for a man in Australia $US152,892, compared to the OECD average of $US185,284 and $US192,167 in the EU (Australian women $US105,374 compared to $US129,198 across the OECD and $US131,992 in the EU).

Higher Education Policy Analyst Tim Pitman said the findings were interesting given the current debates about higher education in Australia, and that eventually the cost of a tertiary degree could outweigh the benefit.

“The report shows that the private benefits of tertiary education for Australian students, whilst positive, are below both the OECD and EU average,” he said.

“If we do move to deregulate higher education fees then it is vital that universities remember this, and don’t charge students purely on the basis of what some are prepared to pay.”

Who is being educated?

More people across the OECD were seeing the value in a tertiary education, with 40% of 25-34 years olds being tertiary educated — 15 percentage points higher than the 55-64 age group.

Three quarters of adults had attained at least upper secondary qualifications, and women aged 25-34 had higher attainment rates in both upper secondary and tertiary education than men in the same age group. In 2000 more men had tertiary qualifications than women, the situation reversed in 2012.

Despite more women having higher levels of education, the employment rate was considerably higher among men (80%) than women (65%). This gap was smallest among tertiary educated individuals and widest among those without an upper secondary education.

The wage gap was still significant between men and women, and surprisingly the gap was largest among the tertiary educated.

The report stated that women with a tertiary education earned 80% or more of men’s wages in only four countries: Belgium, Slovenia, Spain and Turkey, while in Brazil, Chile and Hungary tertiary educated women earned 65% or less than tertiary educated men.

Prominent commentator and feminist Eva Cox said this reflected the power differences that value women’s qualifications less than men’s, and the mal-distribution of social roles.

“It affirms the basic continuing gender biases in society in allocating power and rewards,” she said.

The report showed significant trends in upwards mobility, with 32% of people in countries surveyed having surpassed the educational attainment levels of their parents.

Women were more likely to surpass their parents’ level of education with 40%, compared to 38% of men making it further than their parents. Only 16% on average didn’t obtain equal qualifications to their parents.

Early childhood education

The importance of early childhood education was again highlighted, with results showing 15 year-olds who had at least one year of pre-primary education performed better.

The report found early childhood education played a key role in cognitive development and mitigating social inequities, a fact Australia may have been yet to realise with public spending on early childhood learning well below the OECD average.

Australia spends 0.1% of GDP on pre-primary education, significantly less than the OECD average of 0.6%, with other countries such as Denmark, Spain and Chile spending 0.8%.

Early Learning Policy Expert Susan Krieg said Australia had never really understood the importance of the early years, reflected in the lack of research funding for early childhood education, public provision of early childhood education and care (ECEC), and public responsibility for young children.

“Unlike other OECD countries, Australia does not have an enviable record of research that demonstrates the benefits of quality ECEC,” she said.

“As a consequence we are dependent on international studies and there is now a significant body of international research that demonstrates the social, economic and educational benefits of investment in ECEC.”

Associate Prof Krieg said Australia had adopted a market-driven approach to early learning in which the provision was in response to demand. Whereas a “social investment” approach focuses on the social and economic long-term benefits of early childhood education and care.

“The consequence of this approach is that public responsibility for ECEC is diminished in favour of private provision, competition and resultant inequity,” she said.The ConversationThis article was originally published on The Conversation. Read the original article.


  • Hm. Tertiary educated females have a return on investment of only two thirds the value of an equivalent male. And people say we don’t need feminism…

    • Which is an over simplified look on the situation.

      Let me start by saying that I believe a person’s salary should not be affected by their gender, colour of their skin etc. I’m not at all advocating sexism, racism or what ever.
      But, you’ll find that many women will take time out of the work force to raise children. Now that time may vary, and the effect that has on their salary should be relative to the situation, but it’s not inherently wrong for a company to pay a higher salary to a man with years of experience more than a woman in the same job, because overall experience does matter, as does relevant experience to the current market/company direction.
      Not only that, but when a woman takes time off to raise the kids, the man is often expected to pick up the entirety of the financial burden for the family. In fact, I remember an article on Lifehacker about married fathers were more likely to receive a raise or a promotion than a single male, simply because they’re seen as more stable at the company and a better investment.

      You can’t simply look at the issue as man vs woman, you need to look at the under lying factors as to why these women are being paid less. If it’s simply because they’re women, that’s wrong. If it’s because their male counterparts are worth more to the company as gender-less employees, then that’s not wrong.

      It’s not feminism that we need, it’s just morally acceptable management.

      • @jacrench
        See that’s the problem. You don’t realise how incredibly sexist that comment is.
        Why shouldn’t employers promote women because they’re married and have kids because aren’t they as stable as their male partners? Why shouldn’t men stay at home and women work? If given the choice (and a willing partner) most women would choose to work rather than stay at home and look after the kids, especially if their income is equal to or higher than her male partner. Income inequality is what’s keeping women at home, because the couple knows that she’s going to earn less for the same job, so she begrudgingly resigns herself to that fate.
        Also, how can a male be worth more than a genderless counterpart? That argument makes no sense. Your math is f-ed or you’re saying that men are worth more than women.
        It’s not feminism that we need, it’s income equality.
        People are going to call me a feminist based on this comment, but I’m not.

        • See I think you inferred incorrectly from my comment.

          I never stated that women should stay home and look after the kids. If they want to stay in the work force, and leave the husband at home to look after the kids, so be it, and they should receive appropriate compensation just like their male counterparts. I never stated otherwise. I merely stated that the current state of affairs is that most women still currently stay at home as opposed to the husband. Hell, if I was married with kids and my wife wanted to work, I’d be more than willing to stay at home if need be.

          If women stay at home because they don’t feel they can make the same amount of money, that’s not the employers fault, that’s the women/couple’s fault. They never tried, they’re just as much a cause in this situation. If they went back to work and weren’t compensated equally, I would be backing them for equality. And if they deserve a raise or a promotion, they should get it.

          Lastly, I’ve already stated why their male counter parts may be worth more to the company. Current experience. And that’s the only potential divider I stated. If a woman has more experience than a man, she should be entitled to a higher salary. Experience has value, just like education.

          Stop looking at the situation as women vs men. Start looking at the situation as Person A vs Person B. Compare employee values, if they’re equal in value regardless of gender, they deserve equal pay (assuming they work in the same position at the same company).

          I’m not saying that some cases are not solely based on gender, but you can’t always just assume. Give en employer the benefit of the doubt first before you start calling names.

          • It’s not person a vs person b when you a massive population based study and find that women earn 40-25% less. That’s sexism right there. This is what your argument boils down to (using tobacco smoking as an example):
            “don’t look at it from the point of view of smokers getting lung cancer. Maybe Bob had genetic risk factors for getting lung cancer that Karl didn’t. The fact that Bob smoked and Karl didn’t doesn’t play a role in them getting/not getting lung cancer. You shouldn’t look at the big picture that smokers get lung cancer at a 10 fold rate compared to non-smokers but break it down into Bob vs Karl situations”.
            See that sounds pretty stupid doesn’t it?
            Your counter argument is about as silly as the tobacco lobby’s argument that smoking doesn’t cause lung cancer.
            And no you didn’t say why men are worth more than their female counterparts, you just said there’s institutional discrimination favouring married men over their unmarried male counterparts.
            Your argument that women earn less because most of them chose to stay at home might hold true if their hourly rates were the same between genders but its not. If two people are doing the same job, have the same skill set why don’t they earn the same amount? If they’re of different genders the female will earn anywhere from 60-75% of the income the male will, across all professions. This is a repeatable phenomenon.
            @wallabebe – I can’t agree with you more. Don’t look at gender, look at their skills and whether they are ones which can pay the bills.

          • Honestly I read your comment and to me it looks like we’re arguing for the same thing, so I think it boils down to a miscommunication, probably a fault on my behalf.
            So I’m just going to leave it at that.

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