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Is tertiary education worth it?

Is tertiary education worth it?

Analysis of 10 years of graduate earnings shows that tertiary education returns an earnings premium. However, it also reveals concerning disparities between male and female returns as well those from Higher Education versus Vocational Education and Training qualifications.

Stephen Parker, AO

Special Adviser on Education, and Global Lead, Education and Skills

KPMG Australia


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The latest data on the outcomes of Australian education has been analysed exclusively for KPMG by the National Centre for Social and Economic Modelling (NATSEM), revealing several important insights for policy makers, tertiary education leaders and prospective students.

Key findings

  • Those who finish Year 12 earn more than those who do not.
  • Those with a tertiary education qualification earn more than those whose highest qualification is the Year 12 Certificate.
  • Tertiary-educated men earn more than tertiary-educated women. This is true even when the focus is on the hourly wage (which neutralises the fact that men are more likely to be in full-time work than women).
  • The earnings premium from an average Higher Education (HE) qualification remains strong.
  • The earnings premium from an average Vocational Education and Training (VET) qualification has not closed the gap with HE, and actually there is no significant improvement (on average) over finishing Year 12.
  • The lifetime earning profiles of men and women at different education levels retain the relative gaps between HE, VET, Year 12 and Year 11.
Chart: Wage premiums comparison – All workers

This report is an analysis of earnings associated with qualifications but does not take into account the costs that individual students might incur, including foregone earnings whilst studying. It is not, therefore, a Return on Investment or Cost-Benefit Analysis.

Time to reimagine tertiary education

There are major questions to be addressed if we are to work towards a fair and efficient society that equips us for a changing future.

Our tertiary education system is facing significant challenges to meet current skills shortages and it will face greater hurdles in the near future as the world of work evolves. Understanding the returns from a tertiary education is a vital tool to help reimagine the system.

Read the report to find questions that prospective students and policy makers will need to ask.

© 2020 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved. Liability limited by a scheme approved under Professional Standards Legislation.

KPMG International Cooperative (“KPMG International”) is a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.

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