Category: Employment and work

COVID-19 means that universities should not be held to performance funding targets

Andrew NortonLeave a comment

Update 6/4/20: Since this post was written, the minister has indicated that performance funding is being reconsidered due to COVID-19.

The government’s university performance funding scheme was always based on  questionable assumptions. Among them is the belief that we can reliably distinguish a university’s contribution to various outcome indicators from the other influences on those same numbers.

I’m sceptical enough of this in normal times. But COVID-19 means that, despite the extraordinary efforts of academics and other university staff to provide continuity of education and student support, three of the four performance indicators – graduate employment, student satisfaction, and equity group enrolment share – will or are likely to worsen compared to recent years. The fourth – attrition – will probably show a positive trend that also has little to do with university performance.

Due to the total amount of performance funding being linked to population growth, COVID-19 driven changes to migration levels will also reduce how much performance money is on offer.

Graduate employment

Let’s start with graduate employment, which has a 40 per cent weighting in the performance funding formula. As I argued in a blog post on Monday, previous record-bad employment results in 2014 will be significantly exceeded. Read More »

Will university staff receive the JobKeeper payment?

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Update 9/4/20: Since this post was written there was, briefly, some expectation that the revenue loss required for universities would be lower for 15 per cent. That is not happening. 

Update 24/4/20: This story keeps evolving. Due to a loophole in the legislative instrument, which sets the revenue base at GST turnover rather than total income, some universities look like they have a basis for receiving JobKeeper.

Update 25/4/20: Cancel yesterday’s update, the government is moving to block that one. But there may still be other ways that universities can get JobKeeper. A new post updates the story.

Last night there was some Twitter discussion about whether university casuals would receive the new JobKeeper payment of $1,500 a fortnight. It is to be paid via employers, but casual staff are not eligible unless they have been employed on a regular basis for the last 12 months. Given the on-gain, off-again nature of casual teaching many probably would not be eligible.

But the first issue is whether universities are eligible employers. To qualify, they need to have suffered a significant loss of revenue:

Employers (including not-for-profits) will be eligible for the subsidy if:
• their business has a turnover of less than $1 billion and their turnover will be reduced by more than 30 per cent relative to a comparable period a year ago (of at least a month); or
• their business has a turnover of $1 billion or more and their turnover will be reduced by more than 50 per cent relative to a comparable period a year ago (of at least a month).  (emphasis added)

In 2018 eleven universities had annual revenues exceeding $1 billion. They therefore have the higher 50 per cent drop in revenue requirement, rather than the 30 per cent drop for smaller universities. Read More »

Graduate employment prospects during the COVID-19 recession

Andrew Norton1 Comment

This post looks at the history of economic downturns and graduate employment since the early 1980s – specifically the early 1980s recession, the early 1990s recession and the end of the mining boom in 2013 – to draw out potential implications for the COVID-19 recession.

Historically, each downturn peaks at worse graduate employment outcomes than the previous one. The COVID-19 recession is likely to fit this pattern and deliver record high graduate unemployment. Not only is it likely to be the most severe recession in living memory, but it has already caused massive job losses in industries that are significant graduate employers.

Past recessions

Thanks to old graduate destination survey reports being put online (scroll down here),  the employment effects of past recessions are easier to examine. The early 1980s recession triggered a four percentage point increase, on the best recent outcome in 1980, in university graduates still looking for full-time work four months after completion. But the negative effects were short-lived. By the mid-1980s employment outcomes were better than they had been in the late 1970s (chart below). Graduates of Colleges of Advanced Education had higher proportions looking for full-time work, but this appears to be mostly due to trends that started before the recession. Their results also recovered quickly.

1980s recessions

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Will the COVID-19 recession increase mature-age applications for higher education?

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In an earlier post, I looked at how the COVID-19 recession might affect school-leaver applications for undergraduate education. I concluded that although the lack of job opportunities would favour continued education over unemployment, the scope for applications growth was lower now than during the early 1990s recession.

School retention is much higher now than 30 years ago, and a much larger proportion of the cohort with a potential interest in university already attends. With the age cohort’s size not changing much in the short term there is less room to move.

Interpreting historical application numbers from older university applicants is complicated. It includes relatively young people, did not until the last decade count direct applications to universities (which are mostly from older applicants), and does not distinguish between applicants who are already students but hoping to change courses and those seeking to enter higher education.

With these caveats, the chart below shows a large increase in applications from non-school leavers in the early 1990s. In percentage terms it is larger than the school leaver increase. It is consistent with the recessions drive up higher education demand hypothesis. The scope for growth is high because it is not constrained by the size of recent Year 12 classes.Read More »

Will the COVID-19 recession increase school-leaver applications for higher education?

Andrew NortonLeave a comment

Due to COVID-19 Australia faces the worst recession in living memory. This post is the first of a series looking at how this might influence demand for higher education. But to pre-empt future posts, applications are just one of several factors affecting how many students end up enrolled. Acceptance rates, deferrals, and attrition rates could all change, affecting student numbers.

I will start with the school leaver market. As I have noted previously, in recent years higher education applicant numbers have softened. For school leavers, demography will continue to cap numbers. But within the constraints of age cohort size, could the recession affect applicant numbers?

Recessions change the economics of choosing between higher education and work. If there are no jobs a university student does not forgo pay and work experience. Higher education’s opportunity cost falls. Further study might be the second-best option, but it is better than unemployment.Read More »

The student workforce and COVID-19

Andrew Norton2 Comments

According to ABS statistics, about 60 per cent of students in full-time tertiary education have jobs (this includes vocational and higher education). Their major occupations put them at elevated risk of catching infectious diseases and of losing hours or jobs due to the COVID-19 recession.

Exposure to disease

Because the census has detailed occupational information I am using it as my data source for jobs, even though it is now nearly four years old. The chart below shows the top 20 jobs for higher education students aged 30 or less who work part-time. The top 20 includes just over two-thirds of all employed students in this group.

As expected, student employment has a strong skew to occupations with large amounts of routine interaction with other people. Sales assistants are by far the largest single group. Waiters, bar attendants and baristas make up the next two largest groups. People in these occupations are all relatively likely to interact with someone with COVID-19, although if self-quarantine works not while that person is showing symptoms. job interaction with public

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Do 75 per cent of the fastest growing jobs require STEM skills?

Andrew Norton2 Comments

In promoting the government’s international women’s day STEM announcement, science minister Karen Andrews is reported as stressing that ’75 per cent of the jobs in the fastest-growing industries need STEM skills’. This is a variant on a common claim. In the same article, it also appears as 75 per cent of all occupations, as it has here, here, here, here, here and in many other places. The industries version is less common but still a regular claim, for example here, here, and here.

The original source of this 75 per cent claim has always been hard to find. Some government documents cite this 2015 PwC report. But it does not have any data supporting this number, giving this 2011 article in the Journal of STEM Education as its source. Unfortunately the article does not substantiate the claim either, other than by pointing to this 2007 US Department of Education report. But the report does not mention the 75 per cent statistic at all, and so the trail goes cold.*

Even without checking the claim’s provenance it sounds suspect. How do we define fastest? Top 10, top 20, top half? It would be easy to manipulate the list to produce the desired result. And then there is the distinction between fastest growing (as a percentage of previous levels) and greatest growth (absolute numbers of jobs). Occupations can easily have very high percentage growth rates if they start from a low base, while in absolute terms adding many fewer jobs than larger occupations growing by a smaller annual percentage. Read More »

The changing nature of work training: further evidence and puzzles

Andrew NortonLeave a comment

In August, although I only noticed it yesterday, the OECD published a report on work-related training in Australia relevant to my recent blog posts. It has a couple of data sources I had missed that confirm the declining use of some forms of training.

The HILDA survey has a question about whether employed respondents have undertaken any education or training. Based on the questionnaire, it could have been higher education, vocational education or unaccredited training but it has to be ‘structured’. So it would not include short online self-education.

As the chart below from the OECD report shows, the proportion of workers undertaking any type of training has declined. From peak to trough, the proportion participating in structured learning for work over the previous 12 months has declined by about 5 percentage points.

HILDA work related training

I don’t have access to HILDA data, but it has several questions related to the purpose of the training that could help us understand what is going on (recalling that NCVER data suggests that training for the respondent’s current job is declining more than for a new job or promotion).Read More »

The popularity of online self-education

Andrew NortonLeave a comment

A couple of weeks ago I posted on the surprising apparent decline of reskilling and retraining. Mature-age undergraduate, postgraduate, vocational qualification, ABS work-related training, and ATO self-education expenses have all trended down in recent years. These trends did not seem consistent with the oft-repeated claims of workplace change and the need to reskill and retrain.

Especially on LinkedIn, much of the reaction to the post suggested that this was due to online self-education as a substitute for credentialed and uncredentialed courses and training. While I haven’t found any time series data on how online self-education  has grown, I am persuaded that this must be a significant part of the explanation.

In a recent Pearson global survey of learners, employed respondents who required further training were asked how they did it. In Australia, organised courses or training are still more widely used than online self-education. But a third of the sample had used this method (chart below).

use Pearson

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Contrary to expectations, reskilling and retraining seem to be in decline

Andrew Norton1 Comment

We are regularly being told that in an era of technology-driven labour market change we will need to reskill and retrain much more than we did in the past. Perhaps we will. But it is hard to find evidence for this in the available data.

Let’s start in higher education. As I have noted before, mature-age undergraduate education is trending down. But domestic postgraduate coursework commencing student numbers are also down on their 2014 peak, as seen in the chart below. Education and business courses are driving the decline. Only health and IT courses have enjoyed enrolment increases since 2014.

Total student numbers are still high by historical standards. But with record numbers of eligible students (people who already have degrees), and undergraduate initial professional entry courses being converted into postgraduate qualifications, we would expect strong growth in this type of qualification. It is not happening.

postgraduate commencers

In vocational education too enrolments are trending down, including for people who already have a Certificate III or above qualification (taking the Certificate III as more clearly a career qualification than Certificates I or II). Read More »