Globalisation combined with demographic, technological, climate and organisational change are rapidly changing the way we work and the skills we need. In response, OECD countries have introduced policy options to better align higher education with the evolving labour market.
In Australia, a key reform has been the introduction of entitlement funding models, designed to remove government caps on publicly-funded places and link funding to student choice.
The idea was to boost participation, and improve how higher education and vocational education and training (VET) respond to the modern workforce. Students would proactively consider future employment prospects and enrolment in courses aligned with market needs would naturally increase.
Australia’s experiment with the uncapped systems haven’t gone to plan. Large increases in public spending have been accompanied by concerns over the relevance and quality of courses. This prompted the Federal Government to introduce the Higher Education Reform Package, which imposed a lifetime cap on student loans and froze funding to the sector at 2017 levels for the next two years. Announcing the reforms, the government pointed to a 33 percent growth in domestic University enrolments between 2009 and 2017, but a fall in graduation and employment rates.
Victoria cited a similar experience for VET with reports of improper private provider practices, coupled with rapid enrolment growth in areas seemingly unrelated to skill needs. This prompted the Victorian government to tweak course subsidy levels in an attempt to improve the alignment of VET enrolments with skill needs.
But what help have students had in finding good career paths? The Department of Employment has for a many years published information on occupational skill demand, including occupation-specific employment data and skill forecasts as part of its Job Outlook website. While this information can help students identify occupations with better career prospects, course exploration websites such as the Quality Indicators for Learning and Teaching (QILT) and MySkills for higher education and VET respectively, lack the information that would enable students to find the courses that are best at preparing them for their preferred career paths. Using available data, for example linking national education collections to tax records, would be a first step in bridging this gap, and in turn incentivise providers to improve student outcomes.
By itself though, online information may not be enough to support course choices. It should be integrated into career planning, including into existing career counselling programs. If not, there is the chance that students will rely on powerful anecdotes of peers or family to form views about job prospects. The risk is that they will discount statistically robust online information because of what psychologists (and increasingly economists) call confirmation bias: when someone has an idea, they will seek-out information that supports it and ignore contradictory information.
Little is known on the extent to which current career counselling incorporates job market information, but research on post-school labour market outcomes by myself and co-author Chris Ryan suggests that there is at least a need for better information on VET pathways for school-age students. Our study tracked around 2,500 young people who participated in the Program for International Student Assessment (PISA) Student Assessment (PISA) from age 18 to 25 in the Longitudinal Survey of Australian Youth.
We found students who achieved an average score in PISA testing had labour market outcomes at 25 that were not statistically different to low-achievers who were performing below national standards at 15. We found that the mid-achievers who pursued a VET qualification chose courses that had inferior job prospects to the courses chosen by low-achievers. Our interpretation is that the mid-achievers initially planned for university study and were unprepared to find good VET pathways.
The introduction of entitlement funding models have given people greater opportunities to engage in education and training over a working life. To make the most of it though, we need to provide people with better labour market information, delivered in a way that will help people find career paths that are both realistic and rewarding. Digital platforms provide new low-cost ways to individually tailor this information, but more research is needed to understand how people respond to it and how it can be best delivered to support course choice.
Dr Polidano discussed human capital development through education and training at the 2018 Melbourne Institute Director’s Conference.
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