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Why Study at a Mature Age? An Analysis of the Private Returns to Universtity Education in Australia

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  • Andrew D. Colegrave

    () (Department of Economics, The University of Western Australia)

Abstract

Using data from the 2001 Australian Census of Population and Housing, this article estimates private rates of return to university education at the bachelor degree level for males and females, and determines the age threshold when studying for university qualifications becomes no longer worthwhile. Employing a methodology analogous to Borland (2002), the results indicate that the rates of return for individuals undertaking three year university degrees at the median commencement age of 19 years are 24.8 per cent for males and 20.6 per cent for females; and that returns continue to outperform share market investments right up until males begin their studies in their late thirties and females, much later, in their mid fifties. This article has important policy implications for the problems associated with skilled-labour shortages and the ageing population. Greater subsidizing of tuition fees and extension of the retirement age are suggested to make the education investment of mature age individuals even more profitable.

Suggested Citation

  • Andrew D. Colegrave, 2006. "Why Study at a Mature Age? An Analysis of the Private Returns to Universtity Education in Australia," Economics Discussion / Working Papers 06-11, The University of Western Australia, Department of Economics.
  • Handle: RePEc:uwa:wpaper:06-11
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    File URL: http://www.biz.uwa.edu.au/home/research/discussionworking_papers/economics?f=147014
    File Function: First version, 2006
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    1. Sveinbjörn Blöndal & Simon Field & Nathalie Girouard, 2002. "Investment in Human Capital Through Post-Compulsory Education and Training: Selected Efficiency and Equity Aspects," OECD Economics Department Working Papers 333, OECD Publishing.
    2. Leo Maglen, 1994. "Education Expansion And The Private Returns On A University Degree," Economic Papers, The Economic Society of Australia, vol. 13(4), pages 57-71, December.
    3. Jeff Borland, 2002. "New Estimates of the Private Rate of Return to University Education in Australia," Melbourne Institute Working Paper Series wp2002n14, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
    4. E. Paul Durrenberger, 2005. "Labour," Chapters,in: A Handbook of Economic Anthropology, chapter 8 Edward Elgar Publishing.
    5. Chia, Tai-Tee, 1991. "Has the Value of a Degree Fallen? Cross-Sectional versus Time-Series Evidence," The Economic Record, The Economic Society of Australia, vol. 0(0), pages 41-52, Supplemen.
    6. Austen, S & Giles, Margaret, 2003. "The Likely Effects of Ageing on Women's Involvement in the Paid Workforce," Australian Bulletin of Labour, National Institute of Labour Studies, vol. 29(3), pages 257-278.
    7. Productivity Commission, 2005. "Economic Implications of an Ageing Australia," Labor and Demography 0506001, EconWPA.
    8. Jacob Mincer, 1958. "Investment in Human Capital and Personal Income Distribution," Journal of Political Economy, University of Chicago Press, vol. 66, pages 281-281.
    9. Chapman, B & Salvage, T, 1997. "The Consequences of Recent Changes in Financing for Australian Higher Education," CEPR Discussion Papers 367, Centre for Economic Policy Research, Research School of Economics, Australian National University.
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