The labour market returns to further education for working adults

A growing number of adults have been enrolling in tertiary education to gain new qualifications. This paper investigates the labour market benefits that were obtained by working adults aged 25 to 64 years, who enrolled with a tertiary education provider and completed a certificate or diploma at levels 1-6, from 2003 to 2005. We focus on people who were employed both before and after their spell of tertiary study and use longitudinal administrative data from the Employment Outcomes of Tertiary Education (EOTE) dataset to estimate the impact of education on their subsequent growth in...  [+] Show more

A growing number of adults have been enrolling in tertiary education to gain new qualifications. This paper investigates the labour market benefits that were obtained by working adults aged 25 to 64 years, who enrolled with a tertiary education provider and completed a certificate or diploma at levels 1-6, from 2003 to 2005. We focus on people who were employed both before and after their spell of tertiary study and use longitudinal administrative data from the Employment Outcomes of Tertiary Education (EOTE) dataset to estimate the impact of education on their subsequent growth in average monthly earnings. We use a difference-in-difference approach and compare the earnings changes experienced by the study group members over the pre-study to post-study period, with the earnings changes experienced by a matched comparison group of working adults who did not return to education. Students who completed a level 1-3 or level 4 certificate generally did not increase their earnings relative to the comparison group. However, earnings benefits were gained by students who completed a certificate in a small number of fields of study. On average, diplomas were associated with earnings benefits for women but not men. There were substantial variations by subject field, however, with diploma students in some fields experiencing substantial increases in their relative monthly earnings and those in other fields experiencing relative earnings losses or no effect. Overall, there was only limited evidence of beneficial impacts. Several factors may have contributed to this result. First, 60 per cent of the working adults in the study were already qualified at an equivalent or higher level, and so did not raise their educational attainment level by completing a new certificate or diploma. Second, many certificates and diplomas required the equivalent of one year or less of full-time study to complete. The absence of more significant labour market impacts may partly reflect the short duration of these qualifications.

Published abstract.