Pearls and Irritations

The Minister for Education and Training, Senator Simon Birmingham, in the new Higher Education Reform Package released on 1 May, states that ‘Students deserve improved information from which to make an informed choice on the most relevant course of study for them…’. There is much emphasis in the package on reforms to the information provided to students at the front-end of tertiary education but precious little on providing better information on graduate employment outcomes.

This is in sharp contrast to the comprehensive information on graduate outcomes the New Zealand government is releasing this year in June, following on from an announcement by the then Minister for Education, Steven Joyce, in September 2015. The information, based on tax records and other administrative data, will show for nearly all graduates their employment status and earnings by qualification and field of study at different periods after graduation. This information is to be published for all providers of post-secondary qualifications, not just universities.

The intention is that ‘Students will also be able to see what and where to study to improve their employment prospects’.[1] The aim is also to help education and training providers to ‘better understand and improve their programmes and performance’ and to become more responsive to labour market demand by identifying gaps in the training offered.

What New Zealand is doing is a major advance on the limited and inadequate information available in Australia. The key features of the New Zealand approach include making use of high-quality outcomes data, doing so for nearly all post-secondary graduates, and requiring  all providers publish this information.

The data on outcomes will be based on their dominant activity: whether graduates are employed, in further study, resident overseas, on a welfare benefit or other/unknown. Earnings will be reported for graduates in employment or self-employment in New Zealand using three measures: median, lower quartile and upper quartile. The earnings data will be available for graduate cohorts for each year for up to seven years after graduation. The focus will be on graduates aged 21-29 years to try to identify the effects a qualification has on employment and earnings, separate from the effect of prior work experience.

How it will work? All education and training providers supply data on their graduates to government three times a year as a condition for receiving public funding. These data are then relayed to Statistics New Zealand to include in their integrated database. Separately, providers  are asked to give their written consent to Statistics New Zealand to release data on graduate outcomes for their institutions. These data for each graduate are matched with data based on tax records, welfare payments and border-crossings. The means for doing this is a large research database called the Integrated Data Infrastructure (IDI) which Statistics New Zealand compiles and manages. The IDI is described as a research tool to ‘answer complex questions to improve outcomes for New Zealanders’. Strict confidentiality requirements and protocols have been set to ensure that individuals are not identified in any way.

Education and training providers are expected to provide prospective students with the information on their recent graduates’ outcomes. The collation, analysis and central publication of the data will not cost providers anything.

So what is the situation in Australia? The problem is that information that is available is based on surveys that provide unreliable results for small populations due to a low response rate. Also low response rates to specific questions such as how much do you earn are also likely to produce a bias towards those who are happy to report a good outcome.

The Higher Education Reform Package makes no specific reference to the need to provide students with information on graduates employment outcomes. Mention is made of funding for the website Quality Indicators for Learning and Teaching (QILT) which includes $8 million for ‘measures to improve greater transparency for students’. However, these measures are seen as providing data on real graduate earnings and the likelihood of students completing their course.

The tertiary provider level employment and earnings outcomes information that is available on the QILT website is based on the Graduate Destinations Survey for 2014-15 and the Graduate Outcomes Survey for 2016. Unfortunately the 2016 online survey, despite providing a number of incentives, has a low response rate (40 per cent of all graduates in 2016). There is also considerable variation in response rates between tertiary providers (ranging from 27 per cent for UTS to 55 per cent for the University of New England). This overall response rate may be acceptable for a marketing survey but it is not adequate to provide enough data for qualifications with small graduate numbers. Lower response rates for specific questions such as earnings suggest a bias towards graduates with above average incomes. In short, the New Zealand approach is much better because it makes good use of high-quality administrative data with comprehensive coverage of the target population.

The reform package does acknowledge the need to use taxation data to produce more reliable graduate earning data with these words: ‘In 2017, the Department of Education and Training is working with the Australian Tax Office to develop graduate income data to inform students of earnings potential. Data is scheduled to be published on the Quality Indicators for Learning and Teaching website in early 2018’. However, will these data be available for graduates by qualification and tertiary provider, as available for England?

Also reliance on taxation records alone cannot provide a comprehensive picture of what graduates are doing. Data are needed on whether the graduate is in domestic employment, further study, resident overseas or dependent on welfare benefits. Also needed is information on whether the job is broadly matched to the graduate’s field of study. Student choice of subject and the institution in which to study is dependent on good information about graduate employment outcomes and earnings over time. Australia also faces the substantial challenge of providing this information not only for the graduates of tertiary institutions but also for all post-secondary education and training providers.

Richard Curtain (PhD ANU) is a Melbourne-based public policy consultant specialising in labour market analysis and public policy related to skills formation.

[1] Steven Joyce, 2015, ‘Employment outcomes to be published’, Tertiary Education, Skills and Employment Minister, Government of New Zealand, 14 September.

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