The Returns to Mature-Age Education in Australia
Francisco Perales and Jenny Chesters.
In countries such as Australia education is becoming a lifelong endeavour, with many Australian men and women returning to education to upgrade their skills as a means to change employers, strengthen their claims for a promotion within their current employer, or move from inactivity or unemployment into paid employment. According to the Australian Bureau of Statistics, over one million people aged 25-64 years were enrolled in a formal programme of study in 2016. In 2014, Australia had the 2nd highest rate of participation in tertiary education for people aged 30-64 amongst OECD countries, and the highest for post-secondary non-tertiary education for people aged 25-64. Given this, it is important to understand whether and how returning to education at older ages relates to social and economic gains in Australia. We do so by comparing the earnings and occupational status of mature-age individuals (ages 24-63) before and after they acquire a new educational qualification using 15 years of Australian longitudinal data.
We find that mature-age educational upgrading is quite common in Australia, with about 11% of women and 8% or men attaining a new, higher-order educational qualification over the 15-year observation period. The most common transitions involve moving from less than year 12 education to having a professional qualification, from an undergraduate to a postgraduate degree, and from year 12 education to professional qualifications. On average, the attainment of a qualification between ages 24-63 is associated with wage increases of 9.4% (∼AU$3.40) amongst men and 6.5% (∼AU$2.07) amongst women, and occupational status increases of 4.6 amongst men and 4.8 units amongst women. We also find substantial differences in the returns of different educational transitions, that qualifications obtained at younger ages yield higher pay offs, and that men’s but not women’s wage trajectories become steeper after mature-age educational upgrading.
These findings carry significant implications for Australian education policy and practice. Australia spends comparatively little in education and its institutional support for lifelong learning has historically lagged behind. However, a recent Government review of the Australian income-support system emphasises the importance of continued skill development and the need to invest in lifelong learning. Our findings suggest that policy interventions aimed at encouraging and supporting the upskilling of the older workforce would result in improved labour market outcomes amongst mature-age learners. However, they also provide a cautionary message: different educational options are associated with highly different labour market returns and credentials obtained at younger ages matter more than those obtained at later ages. It follows that any new Australian public policy initiatives concerned with lifelong learning should incorporate this knowledge, providing targeted support.
February 27, 2017