Institute for Social Change News

This presentation by Institute for the Study of Social Change research fellow, demographer Lisa Denny, was delivered to the Tasmanian Leaders Program in September 2018. The purpose is to challenge thinking on the problem of education in Tasmania and how to solve it.

Click on the slides to enlarge them:

It is not disputed that Tasmania has chronic social and economic challenges that manifest as a society in which many experience intergenerational social economic disadvantage and poverty.

In fact there are two distinct groups of people in Tasmania – those who have the opportunity to be educated, work and enjoy the lifestyle that Tasmania has to offer and those who don’t. Those who value education and aspire to work and those who have experienced generations of socio-economic disadvantage and know no other way of life, nor have the opportunity aspire to greater things.

Political leaders and public commentators believe education is the answer to Tasmania’s woes and achieving improved social mobility for Tasmanians experiencing disadvantage.

In fact many of them have stated as such in recent public addresses:

Our Premier Will Hodgman, upon being elected to Government in 2014, stated that education is at the heart of his vision for the state.

He said:

My vision is a Tasmania that is at or above the national average in every NAPLAN measurement, and where we meet national benchmarks in reading, writing, maths and science. A Tasmania where our greatest asset, our young people, are able to achieve their potential and write their own life story. Because a better education usually means better health, and positive outcomes in family life and community participation. And a much better chance of getting a good job. And it’s a vision of a Tasmania that is more economically productive and prosperous as a result … that leads to improving education outcomes to give every young Tasmanian their best shot in life, and to lift our State as well. This is central to my vision for our State.

More recently he said that

There are no better foundation stones to build Tasmania’s future on, than education. It is the key to our future prosperity. Our young people are our greatest asset, and lifting educational results is critical to them being their best and our state reaching its full potential.

Well known and respected economist Saul Eslake contends in his annual Tasmania Reports that:

The most important single reason why Tasmanians are less likely to be employed than other Australians, work fewer hours and produce less for each hour they work if they are employed than other Australians, and earn less in employment than other Australians, is because Tasmanians, on average, are less well-educated than other Australians.

He observes that it is difficult to envisage how young people can significantly improve their life chances and experience without higher levels of educational participation and attainment, concluding that the most important thing that needs to be done in order to improve Tasmanians’ material living standards relative to those of other Australians is to increase the levels of educational participation and attainment.

During a wide ranging interview in the local press, the Governor Kate Warner stated that if we could do just one thing to improve the lives of many Tasmanians, we should get better educated; emphasising, “We’ve got to change”.

Now for a little theory on educational attainment and why it may be the social and economic panacea Tasmania needs …

Human capital theory (HCT) underpins both economic and social policy development.

The overarching premise of HCT is that both society and the economy will benefit from investment, such as education, in people. At the individual level, this benefit manifests itself as improved lifetime earnings, and, at a macro level, in increased productivity and economic growth. HCT assumes a scenario in which productivity and prosperity is maximised by the achievement of equilibrium between the supply of, and demand for, human capital.

The upskilling of the population through increasing the level of education is also expected to lead to increasing competitiveness and demand for higher level skills, ultimately expanding employment opportunities, the availability of work and social cohesion.

Sounds pretty good doesn’t it?

What HCT doesn’t factor in is the demand for labour and skills – that is, jobs and their creation. It assumes that higher education in itself will create employment and demand for higher skills.

This is the greatest criticism of HCT and will be a focus of my discussion.

Given the emphasis on the supply side by HCT and assumption of a perfectly competitive market, the contribution of education to economic growth may be over-estimated.

Critically, HCT ignores the nature of demand in the labour market.

To achieve social mobility there first must be the potential – through improved educational attainment and then it must be realised, through employment.

It is this demand in the labour market that reveals the real economic value of education.

I am not going to discuss retention levels or participation in school as its not my area of expertise, I am going to talk about our population as a whole.

So what is Tasmanians highest level of educational attainment? How do we fare compared with the rest of the country?

The table on the above slide can be partially explained by our ageing demographic, with older people less likely to hold higher levels of educational attainment. At the time of entry to the workforce, members of older generations did not require specific qualifications and would often learn on the job.

There is also Tasmania’s industry profile, which is largely dominated by sectors that do not required higher levels of skills or education. That is, there is a lack of demand for high skilled and educated labour in Tasmania.

What are Tasmanians’ attitudes to education? We hear that Tasmanians do not value education, nor aspire to further education – is this true? And why?

The above slide outlines a 2009 study, which found that Tasmanians:

• Value a high work ethic
• Believe that working hard is a sign of success
• Do not associate education with the ability to find employment and hard work
• Are motivated by their personal environment of community, lifestyle, family, friends
• Look to their community as to possibilities for the future
• Not materialistic or motivated by financial gain
• Generally happy and need little more than what they already have
• Not motivated to get a better job as a job is a means to an end whereby the end is their happiness/lifestyle
• Most were of the view that those in the community were able to be successful (i.e. get a job and work hard) without pursuing further education
• Believe that year 11 and 12 are preparatory years for University
• Believe that given there are no jobs in Tasmania or their community which require university education there was no need to even do year 11 or 12
• Believe that if you pursued higher education that you would have to leave the community and Tasmania

The conclusion made was that further education is seen as a threat to the future happiness of many Tasmanians.

The survey was carried out in 2008, when Tasmania was experiencing low levels of unemployment, considerable skill shortages, when getting a job if you wanted one was possible.

Times have changed … almost 10 years later the boom has busted and we are only just recovering…

The job market is very different in Tasmania to what it was in 2008 and 2009.

The industry structure has changed considerably and there has been a shift to less than full time employment.

The significant opposition to the Government Proposal to reduce the starting age for prep to 4.5 years would suggest that Tasmanians are very engaged with education and education policy – or at least a vocal proportion of Tasmanians are.

Does getting educated mean you have to leave your community or Tasmania?

The above figure shows the highest level of educational attainment for those who lived in Tasmanian one year prior to the 2016 Census by age group.

As you can see, the largest group of people to leave the state were those aged 25 to 29 and more than half of those had achieved tertiary qualifications.

There are many discussions as to whether we should try to keep our young in the State or whether we should encourage them to experience other opportunities with the hope that they one day return. In any case, a large number of young Tasmanians leave the state following the completion of further education.

In 2014 I conducted a study of 462 Tasmanians not living in the state. The research revealed that the majority left the state in search of employment opportunities Others left to pursue education or other opportunities.

The vast majority of them were working wherever they were living.

Now that we have a bit of context, lets talk about the problem of education.

I am going to extend the discussion to include the demand for labour and skills – the bit missing from the theory of human capital and economic and social prosperity and address the question of whether the education problem is a lack of jobs problem. And more specifically, we need to go beyond just the number of jobs, but the type of jobs and the education and skills required to do a job as opposed to getting a job.

The figure above illustrates the supply of labour and skills in the Tasmanian workforce.

It shows an increase in the proportion of Tasmanians who have achieved a post-school qualifications since 2006.

The figure above represents the demand for labour and skills in Tasmania. As you can see, it is very different to the supply of labour and skills.

Tasmania’s occupational structure can be referred to as a polarised workforce.

Skill level is determined by the Australian Bureau of Statistics (ABS) as a combination of educational attainment and skill specialisation using an occupational classification system.

Since 2006 there has been an upskilling of the workforce, with more jobs requiring higher level skills, but also a reduction in those jobs requiring intermediate mid level skills – such as vocational trades requiring certificates III and IV.

Lets look at the change in the demand for labour and skills since 2006.

This slide above show the increase or decrease in the number of jobs by skill level and then the change in the share of the workforce.

It shows an upskilling of the workforce – the largest increases in jobs and share were for those requiring tertiary qualifications, followed by those requiring skill level 2 (Advanced Diploma or Diploma).

However, it also shows a decline in both the number and share of skill level 3 jobs – those that require certificate III or IV. If you read the Institute Insight Reports on the changing nature of work you will know that this is predominately in male-dominated trade occupations and supports the concept of the disappearing working male.

This slide above incorporates the change in the skill level of the workforce:

• the supply of skills and how it compares with the change in demand, and
• the change in the share of jobs by skill level.

It shows that the workforce has been playing catch-up in ensuring supply of skills matches demand – correcting ageing workforces and previous low levels of educational attainment.

The risk is that demand for higher skilled labour will not keep pace with the increased supply of higher skilled labour, which will result in people having to find employment elsewhere – and risk their happiness!

This slide above combines the workforce skills with the occupation’s skill level to determine if there is a match between supply and demand.

The dark diagonal boxes indicate a correct match.

Those to the left of the darker boxes indicate the proportion of the workforce who are overqualified for their jobs and the boxes to the right indicate the proportion who are under-qualified.

A quick caveat here – over-qualification does not necessarily automatically equate to over-skilled – there may be discrepancies between education level and field of study or skill level – but in any case it identifies mismatches between the demand and supply of skills. Also, under-qualification does not necessarily automatically equate to under-skilled, as workers may have developed their occupation-specific skills through on-the-job training, experience and tacit knowledge, particularly with an ageing workforce.

There is evidence of over-qualification for those with certificate III and IV qualifications, which have been declining in demand when working in jobs requiring lower level qualifications.

There is also evidence of job polarisation, which is predicted to continue globally with economic restructuring and the rise of the services and care industries, particularly in Tasmania.

Job polarisation threatens the aspirations for improved economic and social prosperity in Tasmania for a number of reasons.

Not mentioned so far in this presentation is the need for improved productivity in the state – productivity is an indicator of the standard of living for a population.

Increased educational attainment is linked to improved productivity, but if we are not utilising the education and skills available to us we will not achieve improved productivity.

The number and share of entry-level jobs is contracting and the chance of progression or the ability to move from low to higher skilled jobs is increasingly difficult.

The inability to secure quality work has flow-on detrimental effects, which accumulate disadvantages for individuals and society.

There are two critical issues, in my opinion, in solving the problem of education in Tasmania:

One in 5 Tasmanian children are growing up in a household where no parent works:

• To many children, ‘work’ is not ‘normalised’
• They develop no understanding of the relationship between education and work
• There is nothing for children to aspire to.

The demand for labour and skills is a greater issue than the supply of education and skills.

Higher skilled jobs in Tasmania would provide:

• Employment opportunities for parents
• Aspiration for children
• A reduction in the likelihood of young people leaving Tasmania (it becomes a choice or option rather than a necessity)
• A reduction in the perceived “threat to happiness” associated with education.

Lisa Denny is a demographer and research fellow with the Institute for the Study of Social Change.