August 12, 2019

Risks and rewards: when is vocational education a good alternative to higher education?

Over the past 20 years, higher education in Australia has expanded rapidly. By contrast, vocational education attainment rates have fluctuated without much long-term change.

There are concerns that students are encouraged to enrol in higher education, overlooking potentially better-paid vocational education alternatives in areas of labour-market need. These concerns are greatest for low-ATAR university students, whose numbers have increased significantly.

This report contains a detailed analysis of academic and employment outcomes which suggests that these fears are only partly justified. Low-ATAR university students are vulnerable, but only sometimes have clearly better vocational education alternatives.

Low-ATAR students don’t do as well as other higher education students. They are more likely to fail subjects and get low marks, and when they finish their courses are less likely to find professional jobs or earn high salaries.

Especially for men, vocational education offers courses that typically lead to higher lifetime incomes than many low-ATAR university graduates are likely to earn, especially with degrees in fields such as humanities. Vocational diplomas in construction, engineering, and commerce are in this category.

But often, realistic vocational education choices are limited. Students take courses within their interests and aptitudes, ruling out some options. Few low-ATAR humanities students show interest in construction or engineering. A commerce diploma might suit them, although some related occupations are being automated or now require a degree.

Lower-ATAR male students taking science at university might do better with a vocational engineering or construction diploma, especially as lifetime science bachelor-degree earnings are expected to decline.

For women, vocational education alternatives are less attractive. Few women enrol in vocational education engineering, and those who do often have poor outcomes. Engineering occupations are male-dominated, often deny women employment, and are inflexible in providing part-time work.

Teaching and nursing are popular university courses for low-ATAR women. They deliver good employment outcomes to students across the ATAR range. These students are unlikely to do better in a vocational education course.

Especially for low-ATAR men, some vocational alternatives to university are worth considering. Better career advice would alert them to these possibilities. Funding biases against vocational education should end.

But most low-ATAR higher education students are not giving up big opportunities in vocational education. Like higher education, vocational education has risks as well as potential rewards.


Risks and Rewards – Grattan Institute August 2019