Globalization and the Return to Education in Australia

Abstract

Reich argues that globalization will increase the relative earnings of those whose occupation involves identifying and solving problems and managing ideas. Hence, the return to education, especially education in the form of a university degree, will rise. This paper examines the return to education in Australia in the 1980s and shows that in the private sector there has been a substantial rise in the relative earnings of graduates. Due to special circumstances there has been a fall in the public sector. Previous findings of little change are the result of aggregation problems.

Policy issues for Australia's education systems: Evidence from international and Australian research

“…However, TAFE certificates and diplomas do not have strong beneficial effects on the labour market outcomes (Long et al, 1996;Marks et al, Forthcoming). These findings for vocational education that apprenticeships improve employment prospects but that vocational education, in general, does not substantially improve labour market outcomes is consistent with other work in Australia (Dockery & Norris, 1996;Nevile & Saunders, 1998). Furthermore, such findings are similar to that found in other countries (Ryan, 2001).…”

Credential Changes and Education Earnings Premia in Australia*

“…These include Miller (1984), Chia (1991), Maglen (1991Maglen ( , 1994, Karmel (1994Karmel ( , 1995, Gregory (1995), Borland (1996Borland ( , 1999, and Neville and Saunders (1998). These include Miller (1984), Chia (1991), Maglen (1991Maglen ( , 1994, Karmel (1994Karmel ( , 1995, Gregory (1995), Borland (1996Borland ( , 1999, and Neville and Saunders (1998).…”

“…Supply of educated workers increased significantly over this period, so one would expect that such an increase would have most effect on the starting salaries of young workers. Neville and Saunders (1998) consider differences in premia trends by sector of employment over the 1980s, finding rising premia for private sector employees but falling premia for public sector employees. Gregory (1995 speculates on the reasons for the large increase in education levels over the period despite reductions in the earnings gap.…”

Why Have Maori Relative Income Levels Deteriorated Over Time?

“…1 The analysis of rates of return to education that are comparable across more than one time period has, in turn, been pursued in fewer but a growing number of studies. Among studies in this group, Miller (1984), Chia (1991), Gregory (1996) and Nevile and Saunders (1998) have examined changes in returns to higher education in Australia over time; Borland (1999) has provided a comprehensive survey of analyses on changes in the income distribution in Australia and the contribution of educational attainment and earnings to it; for New Zealand Maani (1997Maani ( , 1999 has examined the returns to postcompulsory education across four census years; and Ryoo (1988), Behrman and Birdsall (1987), and Psacharopoulos (1994) provide international evidence on this question. These studies provide international support for the link between educational attainment and income levels, that these returns change over time and that the changes are greater with market deregulation.…”