Jennifer Chesters. Private schools, fees and longer term payoffs.

Aug 17, 2014

In a recent article published by TheConversation, Barbara Preston examined the link between type of school attended and progress at university. Barbara concluded that after controlling for tertiary entrance score, university students from government schools outperformed students from private schools. This finding suggests that paying for an expensive private school education may not be the best preparation for university study. If this is the case, perhaps parents paying private school fees are looking for longer term pay-offs for their investment.

In this paper, I analyse data from the 12th wave of the Household Income and Labour Dynamics in Australia (HILDA) project to examine the longer term outcomes of attending private schools. For the analysis, I select one respondent aged between 25 and 34 years per household. The majority of young people have completed their education by the age of 25 years and are settled in their careers by the age of 34 years. The actual analyses that produced the findings discussed here is available (insert hyperlink to appendix here).

Preliminary analysis shows that individuals who attended Catholic or independent schools were more likely to have completed Year 12 and to have graduated from university, after controlling for the effects of parents’ education, age and sex.

But are there differences in labour market outcomes? Here the type of private school is important. Although those who attended a Catholic school were, on average, 1.3 times more likely to be employed on a full-time basis compared to those who attended a government school, former independent school students were no more likely to be employed on a full-time basis compared to those who attended a government school after controlling for the effects of level of education, sex and age.

This result seems to suggest that paying private school fees is no guarantee of securing full-time employment. Given that women in this age cohort are in their prime child-bearing years, I also looked at the effect of interactions between sex and type of school attended; sex and age; and sex and level of education to determine whether there are differences between men and women. As expected, women were less likely than men to be employed on a full-time basis.

Next, I examined the earnings of those employed on a full-time basis according to type of school attended controlling for the effects of sex, age and level of education. When it comes to weekly earnings, having attended a private school rather than a government school has no effect. So there would seem to be no return on the parents’ investment in terms of the earnings of their offspring.

Perhaps parents were seeking to ensure that their offspring secured jobs with high levels of prestige in order to maintain their social status. After taking into account the effects of level of education, sex and age, having attended a Catholic school is associated with higher, on average, levels of occupational prestige than having attended a government school.  On average, attendance of an independent school is not associated with higher levels of occupational prestige.

So why are parents choosing to send their children to independent schools?

A closer examination of university graduates may shed some light on this paradox. Of the individuals who had completed a university-level qualification, those who had attended an independent school were more likely to have graduated from a Group of Eight (Go8) university compared to those who attended a government school. However, individuals who had attended a Catholic school were no more likely to have graduated from a Go8 university. Perhaps parents expect that graduation from an elite university would provide a pathway into a higher paying career.

For university graduates employed on a full-time basis, graduation from a Go8 university had no effect on occupational prestige after taking into consideration the effects of sex, age and type of school attended. However, it is interesting to note that attendance of a Catholic school had a positive effect on occupational prestige. There was no pay off for graduation from a Go8 university in the form of increased earnings, nor did type of school attended have any effect, after controlling for the effects of age, sex and field of study.


Summing up, these results call into question the wisdom of paying private school fees, particularly for independent schools. The massive growth in the number of private schools since the 1990s may be having the effect of diluting the advantages perceived to be attached to private schooling. If, as these results suggest, there is no long term advantage to be gained from paying to attend an independent school, why do parents stretch their family budgets to pay private school fees?

Dr Jennifer Chesters is a Research Fellow at the University of Canberra. This article was first published in The Conversation on 13 August 2014. I also posted an article by Barbara Preston ‘State school kids do better at uni’ on August 13. This article was also first published in the The Conversation.














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