Diverging Labour-Market Trajectories of Australian Graduates from Advantaged and Disadvantaged Social Backgrounds: A Longitudinal Analysis of Population-Wide Linked Administrative Data

Diverging labour market trajectories of Australian graduates from advantaged and disadvantaged social backgrounds: A longitudinal analysis of population‐wide linked administrative data

“…Our results reveal increasing returns to higher education over time since graduation across all groups of graduates, marked by both increasing earnings and decreasing reliance on income-support payments. This evidence is consistent with the notion of career development and certain core tenets of human capital theory, as well as corroborating findings from previous empirical studies (for example, Friedman and Laurison 2019;Jacob, Klein and Iannelli 2015;Tomaszewski et al 2021). The rate of growth in returns is generally highest in the first three years after graduation and tapers off towards the end of our observation period -at approximately seven to ten years after graduation.…”

“…Despite the overall growth pattern, our findings also highlight noticeable disparities in outcomes depending on graduates' social backgrounds. Specifically, and consistent with previous studies (for example, Pitman et al 2019;Richardson, Bennett Roberts 2016;Tomaszewski et al 2021), we observe poorer postgraduation outcomes among students from disadvantaged social backgrounds relative to their more advantaged counterparts. On the whole, NESB graduates and those with a disability experience the worst outcomes relative to their comparison groups, whereas low SES graduates achieve the most similar outcomes.…”

“…Potential factors contributing to worse outcomes among graduates from disadvantaged social groups include lower social and cultural capital (Burke, Scurry and Blenkinsopp 2020;Coleman 1988;Franzen and Hangartner 2006;Lin 2001), smaller social networks through which to secure "good" jobs (Friedman and Laurison 2019;Manroop and Richardson 2016) and implicit and/or explicit discrimination by employers (for example, Quadlin 2018; Rivera 2020). Collectively, these factors may diminish the chances of graduates from disadvantaged social backgrounds leveraging their educational credentials to access good jobs, negotiate high wages and achieve upward career mobility (Tomaszewski et al 2021;Witteveen and Attewell 2020).…”

“…Compared with longitudinal models, cross-sectional models are less able to account for unobserved sources of confounding, making the results more vulnerable to omitted-variable bias (Singer and Willett 2003). Perhaps more importantly, the single-point data sets used by most studies do not allow for more nuanced analyses of post-graduation trajectories in outcomes, which provide important information about whether any differences between social groups in returns to university education change over time (Tomaszewski et al 2021). In this study, we observe individual graduates for up to six years and track outcomes across different cohorts of graduates for up to ten years after graduation.…”

“…Moreover, research indicates that students from privileged backgrounds are more likely to access more prestigious degrees and higher education paths (Borgen and Mastekaasa 2018). Recent studies also point to gaps in post-graduation outcomes between individuals from advantaged and disadvantaged backgrounds -considering socio-economic background and ethnicity (Richardson, Bennett and Roberts 2016;Triventi 2013) -although there is some evidence that these gaps fade over time (Jacob, Klein and Iannelli 2015;Tomaszewski et al 2021). Differential or delayed returns to university education among graduates from disadvantaged social backgrounds represent a loss of productivity, a threat to social equity and a policy challenge.…”