Roughly one-quarter of Australia's 19 year olds do not complete Year 12 or equivalent qualifications and a similar proportion of 24 year olds are not actively engaged in work or education, according to a major recent study [indexed in VOCEDplus at TD/TNC 122.1075]. In this report, the authors calculate the fiscal and social costs associated with both early school leaving and not being actively engaged in work and study in the post-school years. For individuals, missing out on the benefits of education generates costs not only because it affects occupational prospects, wages and job satisfactio... Show more
Roughly one-quarter of Australia's 19 year olds do not complete Year 12 or equivalent qualifications and a similar proportion of 24 year olds are not actively engaged in work or education, according to a major recent study [indexed in VOCEDplus at TD/TNC 122.1075]. In this report, the authors calculate the fiscal and social costs associated with both early school leaving and not being actively engaged in work and study in the post-school years. For individuals, missing out on the benefits of education generates costs not only because it affects occupational prospects, wages and job satisfaction, but also because it influences decisions people make and behaviours affecting health, marriage, parenting, and roles as citizens. These costs accumulate as those who miss out progress through adulthood until the end of their working lives. There are costs to the taxpayer which include things such as reduced tax revenue as well as increased public expenditure on crime, health, welfare, housing and income support, and associated services. There are also costs both to the individual and the community (social costs), such as loss of personal earnings, the social consequences of crime and excess burden of higher taxes required for additional social services.
The economic model used to estimate the costs uses national research evidence and national survey and census data. The model creates lifetime economic profiles for early leavers (students who fail to complete Year 12 or equivalent by age 19) in comparison to those who completed Year 12 or equivalent qualifications, and for disengaged young people (young people not in full-time work or study at age 24) in comparison to other young people. The profiles are expressed as present values at age 19 for early leavers and at age 24 for disengaged young people and estimated in 2014 prices. Estimates of annual and lifetime (working age) costs are derived in the areas of health, government assistance, crime, earnings and employment. The authors conclude that the costs of having many young Australians leave school early and grow up without the skills needed to thrive in the 21st century, emphasises the need for educational reform and reveals the extent of the burden if no action is taken.
Edited excerpts from publication.
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