Graduate Winners - Grattan Institute

Weidmann, a Grattan Institute Senior Associate and James Savage, a Grattan Institute ... jobs, above-average pay and status. ..... Information technology.
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August 2012

Graduate Winners Assessing the public and private benefits of higher education

Andrew Norton The housing we’d choose

Graduate Winners

Grattan Institute Support Founding members

Grattan Institute Report No. 2012-7, August 2012 Program support Higher Education Program

This report was written by Andrew Norton, Grattan Institute Higher Education Program Director. Ben Weidmann, a Grattan Institute Senior Associate and James Savage, a Grattan Institute Associate provided extensive research assistance and made substantial contributions to the report, including writing the two technical papers available on the Grattan website. We would like to thank the members of Grattan Institute’s Higher Education Program Reference Group for their helpful comments. The opinions in this report are those of the authors and do not necessarily represent the views of Grattan Institute founding members, affiliates, individual board members or reference group members. Any remaining errors or omissions are the responsibility of the authors.

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Grattan Institute is an independent think-tank focused on Australian public policy. Our work is independent, practical and rigorous. We aim to improve policy outcomes by engaging with both decision-makers and the community. For further information on the Institute’s programs, or to join our mailing list, please go to: http://www.grattan.edu.au/

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This paper uses unit record data from the Household, Income and Labour Dynamics in Australia (HILDA) Survey. The HILDA Project was initiated and is funded by the Australian Government Department of Families, Housing, Community Services and Indigenous Affairs (FaHCSIA) and is managed by the Melbourne Institute of Applied Economic and Social Research (Melbourne Institute). The findings and views reported in this paper, however, are those of the authors and should not be attributed to either FaHCSIA or the Melbourne Institute. This paper uses unit record data from the Australian Survey of Social Attitudes, a survey managed by the Australian National University and accessible through the Australian Data Archives. The findings and views reported in this paper, however, are those of the author and should not be attributed to either the Australian National University or the Australian Data Archives.

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Grattan Institute 2012

This report may be cited as: Norton, A. 2012, Graduate Winners: Assessing the public and private benefits of higher education, Grattan Institute ISBN: 978-1-925015-26-3 All material published or otherwise created by Grattan Institute is licensed under a Creative Commons Attribution-NonCommercialShareAlike 3.0 Unported Licence.

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Graduate Winners

Overview Most students should pay more for higher education, given how much they benefit from a degree. By the middle of this decade, tuition subsidies will cost taxpayers around $7 billion. Yet it is not clear why the public should pay. It is time for a new approach. Graduates do well out of higher education. They have attractive jobs, above-average pay and status. They take interesting courses and enjoy student life. Given these large benefits, and with the HELP student loan scheme in place, most subsidies are for courses that students would take anyway. Benefits greatly outweigh costs for most students, and the minority of graduates who don’t win through higher income never pay for their degrees, as a result of the HELP scheme. In effect, today’s tuition subsidies redistribute income towards graduates, at the expense of the general public – particularly those who do not go to university.

In general, governments do not subsidise public benefits where there are incentives t