The link between educational attainment and income has long been known. Now Australians have more information about what graduates earn from different universities and courses.A recent report shows graduates from NSW universities generally have the highest median income. Unsurprisingly, so do graduates from dentistry and medicine courses.
It’s tempting to think these results show how some degrees and universities are inherently better than others. But just using wage outcomes is a poor way to judge education’s worth. There are several reasons for this.
First, how education results in higher wages can have little to do with the content of an education experience. Second, there are many different ways education is valuable to an individual and to society beyond earning capacity. We should remind ourselves of this when we examine why we continue to invest our time and energy into education.
Why do some graduates earn more?
The conventional wisdom is that it’s what we learn that produces higher wages. Employers pay a higher premium to access the skills and knowledge an individual acquires while studying. This is why many people might think there’s something special about the teaching and learning at NSW universities that means their graduates earn more.
But more students studying at NSW universities will not guarantee them all the same higher wages. Education is sometimes known as a “positional good”. This means educational attainment makes one person more attractive to employers relative to another.
It also means education does not necessarily make someone more productive. But it does make it easier for them to access the better, higher-paying jobs.