Australian Mobility Report Cards: Which Universities Admit the Most Disadvantaged Students?

• Published date: 01 September 2021
• Author: Andrew Leigh
• Date: 01 September 2021
• DOI: http://doi.org/10.1111/1467-8462.12430

The Australian Economic Review, vol. 54, no. 3, pp. 331–342 DOI: 10.1111/1467-8462.12430

Australian Mobility Report Cards: Which Universities Admit the

Most Disadvantaged Students?

Andrew Leigh*

Abstract

Tertiary education has a vital role to play in

fostering social mobility. To assess the extent

to which Australian universities enrol dis-

advantaged students, I use two measures of

disadvantage: neighbourhood characteristics

and individual characteristics, and compare

higher education institutions. Neighbourhood

metrics appear to be a poor proxy for

individual disadvantage. Yet even so, some

institutions stand out as more effective path-

ways for disadvantaged students. I conclude

with some recommendations for improving

data quality, education policy and evaluation

in order to make Australian universities more

effective engines of social mobility.

1. Introduction

Few investments have so large an economic

payoff as attending university. The typical

bachelor degree holder earns almost 50 per cent

more than someone who completed year 12

(Leigh 2008). At the median, this amounts to a

lifetime after‐tax earnings premium of around

$600,000 for women, and $800,000 for men,

although there is some overlap between the

earnings distributions of graduates and non‐

graduates (Norton, Cherastidtham and Mackey

2019, p. 14). Evidence from the United States

suggests that there are large returns even at the

margin: among students who only just scraped in,

the wage gains from attending university are

considerably larger than the costs of tuition and

foregone income (Oreopoulos and Petronijevic

2013; Zimmerman 2014;. Differences in educa-

tion have been found to be a significant driver of

intergenerational disadvantage in Australia

(Bubonya and Cobb‐Clark 2021).

However, there has been a growing concern

that the benefits of university may not be

evenly spread across the population. For

example, Chetty et al. (2017) find that US

children whose parents are in the top 1 per

cent of the income distribution are 77 times

more likely to attend an Ivy League college

than those whose parents are in the bottom

income quintile. Unlike their US counterparts,

Australian domestic undergraduates pay via

income‐contingent loans. Nonetheless,

average university tuition fees are not that

different in Australia and the United States.

1

Higher education equity is a live issue in

* Parliament of Australia, Canberra ACT, 2600 Australia;

email <Andrew.Leigh.MP@aph.gov.au>

This article uses unit record data from the Household,

Income and Labour Dynamics in Australia (HILDA)

survey. The HILDA Project was initiated and is funded by

the Australian Government Department of Social Services

(DSS) and is managed by the Melbourne Institute of

Applied Economic and Social Research (Melbourne

Institute). The findings and views reported in this article,

however, are those of the author and should not be

attributed to either DSS or the Melbourne Institute. My

thanks to Andrew Norton, two anonymous referees, and

co‐editor Ross Williams for valuable suggestions.

© 2021 The University of Melbourne, Melbourne Institute: Applied Economic & Social Research,

Faculty of Business and Economics

Published by John Wiley & Sons Australia, Ltd