Further study brings further rewards
Australians who complete postgraduate degrees can expect to earn double, or $3.2 million, over their working lives compared to people with a Year 11 level qualification, who can expect to earn $1.7 million, according to the latest AMP .NATSEM report.
The report also confirmed the entrenched earnings disparity, with a 25 year old woman with a postgraduate degree can only expect to earn just two thirds of her male counterpart’s lifetime earnings, or $2.5 million compared to $3.2 million.
A massive generational shift in educational attainment is also evident, with 77 per cent of students completing Year 12, up from 45 per cent of students in 1984. The report also found that 44 per cent of 25-34 year olds hold a tertiary degree qualification, compared to 30 per cent of 55-64 year olds.
Spending on education has also recorded a significant increase, with the average family spending on preschool and primary school education rising by 79 per cent, while spending on secondary education increasing by 101 per cent.
Families are also increasingly sending their children to Catholic and independent schools, especially for high school.
Although Australia is just below the OECD average on education spend, at 6.2 per cent of GDP, ranking 20th, Australian students are positioned 6th in reading and science literacy and 9th in mathematical literacy.
“The report shows a person with a Bachelor Degree will also receive a high return on education, earning almost 1.7 times someone with Year 11 or below,” AMP Financial Services Managing Director Craig Meller said.
The Smart Australians report also shows that our education levels are being further bolstered by new arrivals to Australia with 46 per cent of 25-34 year old migrants holding a Bachelor Degree or above, compared to 20 per cent of those born in Australia.
Key findings include:
Getting an education pays off in future earnings
- People with university degrees are likely to earn almost twice as much as their peers in the same industry with no university degree.
- A 25 year old working in the management and commerce sector would earn $3.6 million if they had a Bachelor or Postgraduate Degree, but only $2.1 million if they had no university degree.
Women still face earnings inequality
- Women with postgraduate qualifications earn $1.3 million less over their lifetime than male postgraduates – at $2.5 million compared to $3.8 million.
Young Australians are leaving their parents for dust in the educations stakes
- Gen Y (those aged 20-35) are more educated than older Australians - on average 66% have completed Year 12, compared to 40% of Baby Boomers (aged between 50-64).
Education apple doesn’t fall far from the tree
- A person whose father has attained a university degree is much more likely to go to university (66%), compared to those whose father only obtained Year 10 or below (29.3%).
An increasing number of parents are choosing private schools for their kids
- Over the past decade, student enrolments in Catholic and independent schools have grown at a faster rate than government school enrolments, with 22% of secondary school students now enrolled at Catholic schools and 18% at independent schools, compared to 20% for Catholic and 14% for independent in 1997.
Vocational or ‘technical’ education is gaining in popularity
- The level of vocational education training (VET) has risen significantly in recent years with 25% of 15-19 year olds holding a VET qualification, compared to 20% in 2006.
- Victorians are the most likely to hold a VET qualification.
- There is a growing trend of students combining high school education with VET training, with VET training in schools accounting for more than half of total VET students.
Big differences in education across the states and territories
- The ACT has the highest proportion of people with Year 12 or equivalent and the lowest levels are in the Northern Territory - 72% compared to 41%.
- 25% of 15-64 year olds living in the ACT hold a Bachelor Degree, compared to 18% in NSW and a national average of 17%.Vic, ACT and NSW primary school students are high achievers
- Students in Victoria, the ACT and NSW on average achieved higher NAPLAN scores at 499,497 and 496 respectively, compared to the national average of 485.
ACT, Qld and Vic students most likely to complete Year 12
- The ACT, Queensland and Victoria’s retention rates are above the national average, at 98%, 83% and 82% respectively, with the national average at 79%.
Research and development spending on par with international levels
- Public and private investment in research and development accounts for 2.2% of GDP, only a fraction lower than the OECD average, ranking Australia in 12thplace.
- There has been a significant increase in R&D funding since 2004, with current investment at about $28 billion.
Australia has a two-speed research and development economy
- Increases in research and development spending have largely stemmed from the mining states – with Western Australia recording a massive increase of 283% over eight years and Queensland an increase of 116 per cent over the same period.
The full report can be found here