I have discussed many times how education is positioned as the most effective strategy for creating an employable workforce.
Subscribe now for unlimited access.
$0/
(min cost $0)
or signup to continue reading
It is of national importance that people are engaged in education and ultimately gain relevant qualifications for employment.
Unfortunately, as shown in a recent report, around 26 per cent of young Australians do not stay in school to complete year 12, nor have an equivalent level of education. In 2015 that equates to around 81,000 young people.
Living in a remote area or coming from a family living in poverty increases the risk of not completing education to year 12 level. In these circumstances, 40 per cent of young people do not achieve this education benchmark.
Research shows that some of these young people re-engage with the education system in some way and achieve a Year 12 equivalence, but for those who do not do so by aged 25 (around 90 per cent of men and 82 per cent of women), the likelihood is that they will remain dis-engaged for their lifetime. This dis-engagement is not only in education but in employment
What does this mean for society?
In terms of actual money, every individual who leaves school before completing year 12 and remains disengaged costs the taxpayer $412,000 over their lifetime. If we add up the cost for the 46,000 people who remain disengaged, the cost to the taxpayer amounts to $471 million a year ($18.9 billion over a working lifetime).
Along with direct costs is the loss of tax revenue associated with unemployment or employment in low-skilled, low-paying work. On average, a 25-34-year-old person who is disengaged/unemployed or under-employed pays about $2100 a year in tax compared to the $13,200 paid by better qualified young people. Those who are fully employed with a tertiary education earn around 34 per cent more than those with Year 12-level education and 55 per cent more than those without a year 12-level education.
Are we returning to a system where higher education is only for the privileged?
The social costs are even greater. We know that those who remain in education are more likely to be employed, are less likely to be welfare dependant and have better health.
With disengagement there is also an increased risk for involvement in criminal activity. It is estimated that these social costs associated with disengagement amount to around $1.1 million over the working lifetime of each individual person; this is about $1.2 billion annually.
In this climate of growing inequity, and despite strong evidence demonstrating that participation in education is crucial, not only for the wellbeing of individuals, but for the healthy economy of a nation, the federal budget includes changes to the way higher education is funded that will significantly limit access of people from a range of disadvantaged groups to higher education.
Retention is proposed to be a key driver of equity funding, so that those who are at risk of not completing are less likely to be offered opportunities to study because they will cost more to teach, and because they are more likely to cycle in and out of the system, being counted in attrition figures more than once.
Are we returning to a system where higher education is only for the privileged? It is beginning to appear so.