The private rate of return to a university degree in Australia

This report presents estimates of the monetary benefits in Australia associated with the completion of Bachelors and Masters degrees for a range of fields of study. The results show that for the average person, there are strong monetary incentives to complete these degrees, particularly at the undergraduate level, and the private rate of return compares favourably with the long term real bond rate of between two and three per cent. The report presents results calculated on varying assumptions providing evidence of the robustness of the conclusions. Section two considers the choice of methodology and outlines the major theoretical and practical issues that have been confronted in the literature on the returns to education. Section three summarises the results of some recent Australian studies of the returns to higher education. Section four presents the assumptions used here to calculate the private rate of return and section five presents some results. The final section draws some conclusions.

Excerpt from publication. Show less