The Overeducated Australian?

Andrew Norton has been running some interesting posts on over-education. I don’t doubt that some people acquire more education than they need for their jobs (just as others squeak by with less than they really need). But I doubt that over-education is a significant problem. The returns to education have stayed very stable over the past 20 years. If anything, there’s a bigger economic benefit to going to university today than in the past. This suggests that employers think that attending university gives graduates something that’s worth a salary rise. If that were not true, they’d buy a non-graduate, and cut their wage bill by 30%.

Update: Andrew Norton responds. His point (I had misunderstood it) was not that the share of overeducated Australians is rising, but that it’s non-zero. I agree with this, but I think this distinguishes Andrew from many others, who claim that overeducation is more of a problem today than it once was.

On a tangential note, Andrew had a great post last week (reprising his new CIS paper) on the effects that command-and-control planning in the Australian higher education sector has had on the market for doctors.

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15 Responses to The Overeducated Australian?

  1. Barbara says:

    Over educated- I agree completely as we seem not to recognise experience. I am a nurse of 28 years experience with hospital based certificates in Intensive Care and Midwifery. Years of clinical experience yet I am at a disadvantage when I go for another higher level job because I do not have that piece of paper from a university!
    I tried to get into a University in Qld that recognised my RPL (recognised prior learning) without success. I would have to go through the entire 3 year Bachelor of Nursing as if I was a school leaver. Thankfully I was accepted interstate and doing my Masters!!!!

  2. gringo says:

    On the average returns to education, Preston (1997) compares returns to higher education using 1981 and 1991 Census data. The returns to those with a degree appear to decline across this time period.

  3. Greg Hamilton says:

    Again, everybody lurches in on an understanding of education that is wrong, so not much good can come out of the debate that ensues – unless somebody corrects the wrong assumption. For example, the abundance of university graduates today doesn’t mean better-educated people. The Latin ‘educere’ means to draw out, not ram in. The great bulk of what masquerades as education today is condition or training. Pavlov’s dogs were ‘educated’ by the definition employed here. The opposite of that, a person who has had the wealth within him drawn out by learning facilitators, is an educated person. And rare they are. Do we have an over-conditioned public today? Most certainly.

    By the same logic, our assumption about the meaning of the word ‘intelligence’ is way off the mark. Intelligence is something quite different, but the definition of the real thing is an anathema in the society we’ve manufactured. I suspect education’s real meaning is too. We’re too committed to bullshit because it’s unconfrontational and allows the sleep to go on.

  4. Anne Magarey says:

    Thanks, Greg, you’ve hit the nail on the head. Those who do get educated at universities are despised – they do history, politics, philosophy, study and think about ideas…..You can’t get a job that way!!

    How much we need these people in this produce and consume society.

  5. Andrew Leigh says:

    Gringo, I don’t see the same pattern when I look across a longer period.

    Greg/Anne, the notion that people get education so they can get a better-paying job is simplistic, to be sure. But that’s not to say we can’t learn something from such pared-down models of the world.

  6. wilful says:

    I think the creeping standard in accreditation is the killer. I didn’t really need my Masters to do the job I do, just to get it. And I’m not learning that much from the masters I’m now undertaking – but it looks great on the resume.

  7. “Greg/Anne, the notion that people get education so they can get a better-paying job is simplistic, to be sure.”

    Having read a lot of the over-education literature recently, I don’t think anyone assumes that *all* ‘over-education’ is a problem. But as my posts this week show, there is evidence that it is a problem for some people, and the fact that others study for reasons unrelated to work does not disprove this.

  8. mila says:

    Dear All,
    What would you say if you see self explanatory evidence that Australian’s Dental/Medical Professors are PURPOSELY closing their eyas and ears DESPITE of knowing that “holistic/cosmetic ” dentistry is the real reason for sudden epidemic of mental illnesses in Australia.

    Those “holistic” dental procedures of changing children’s and women’s bite were last time openly practiced during Hitler time by mad scientist, Dr Mengele and in Holiwood and Australian since 1993.

    Would anybody believe that we are constantly losing natural health of our human capital in order to make shareholders in Biotech Health rich and powerful .

    Our University are not only prepered to sell their degrees to international students who even do not speak English but also to big Pharmas to RECEIVE big money for “scientific researches”.

    How could any medical scientist be really good really if they had such limited training/knowledge about Anatomy and Physiology of healthy human body in the first place?
    New Gardasill vacine is going on the long run to seriously effects our young women as it would have detrimental efects on pituitary gland.

    More than 15 years ago we had the same “preventative dental treatment to prevent breathing dificulties” resulting in mental illnesesfrom such Frinkenstan’s experiment.

    This is only reason why Australian people are complaining that they are worse off after leaving hospitals then before they came in.Hospitals are nothing else but big experimental ground.

    We Australians are left ignorant as we serve only as human guinea pigs for accumulating needed numbers for registration of any new drugs.They need a lot of “sick people”


  9. Tim Worstall says:

    The wage premium for an Arts degree in the UK seems to have vanished, and in some cases is actually negative, given the greater value of three years’ work experience.
    That would seem to indicate a measure of over education wouldn’t it?

  10. Andrew Leigh says:

    Tim, do you have a citation for that? I confess to being astonished; I’ve never heard of the university premium falling to zero for any type of degree.

  11. Tim Worstall says:

    Best I can do this this:

    According to one study by Nigel O’Leary and Peter Sloane of Swansea University, the graduate premium is well under £400,000 and falling, reflecting the fact that the huge rise in the number of students in the 1990s is eroding the premium. They estimate that graduates can now expect to earn an average earnings premium of just £140,000-£150,000 over school leavers with two or more A-levels.

    Subject choice is crucial. Other things being equal, the rates of return to maths and computing, engineering and technological subjects and medicine (the “hard” subjects) are, unsurprisingly, robustly positive. Other choices are less remunerative and, in the case of arts degrees for men and after allowing for the new £3,000 level of tuition fees, the calculated average rate of return is actually negative.

  12. I wrote a paper (pdf) seven years ago pointing out that salaries of Arts graduates here were not high compared to other disciplines, which of course had me widely denounced as a philistine.

    I did not have any good recent Australian data to use in my most recent paper, but I would be very surprised if Arts graduates were not significantly over-represented among those not in ‘graduate’ jobs. They are certainly struggling in the few months after completing their courses, as the Graduate Destination Survey shows.

  13. Andrew Leigh says:

    Tim, thanks for that. FYI, the paper is here. My guess is that the reason for the apparently trivial returns to arts degrees for men is small sample sizes (they never tell us the standard error for this particular estimate).

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