Mining beat degrees
NO MORE pencils, no more books – at least when a mining boom is under way.
Almost 75,000 Australians would have a university degree had the mining boom never happened, a new report from the Reserve Bank suggests.
The paper finds that during the mining boom, high wages paid for jobs that did not require a tertiary degree resulted in a pronounced decline in full-time study rates in the mining states of Western Australia and Queensland.
It concludes that all up, the number of Australians with university degrees would be half a per cent higher if the mining boom had passed the nation by.
Numbers from the Australian Bureau of Statistics show 31.4 per cent of Australians aged 20 to 64 have a bachelor degree or higher.
A half a per cent increase in university graduates equals 74,500 extra degrees.
“The mining boom led to large increases in wages for many lower-skilled jobs in mining regions,” the paper from the RBA’S economic research department says.
“This raised the opportunity cost of remaining in school, TAFE or university for many students, particularly those in mining areas ... this led fewer people in those areas to pursue tertiary study.”
In the decades leading up to the mining boom, the share of young people in fulltime study followed “remarkably similar” trends across all states and territories, the paper says.
This changed after the onset of the mining boom in the early 2000s.
The full-time study rate among 15 to 24-year-olds continued to rise in non-mining states such as Victoria but stopped rising in Western Australia and Queensland, the paper says.
“The gap mining and between the non-mining states’ full-time widened by 6 points between
2012,” it says.
“This divergence is statistically significant and large; taken at face value, it suggests that 6 per cent of all 15 to 24year-olds in the mining states did not pursue full-time study (or postponed their study) as a result of the boom.”
The paper notes the trend could have longer-run consequences for the overall productivity of the economy.
“This is another potential negative side effect of the mining boom aside from ‘Dutch disease’, where a higher exchange rate leaves the manufacturing sector uncompetitive and industrial capacity is hollowed out,” it says.
The RBA paper notes that while the mining boom lowered the nation’s educational rates, workers in the resource industry benefited from onthe-job training.
“At a minimum, those choosing work and earning income through that period would have been likely to start the post-mining boom period in a stronger financial position than those studying throughout the period and incurring study expenses,” it says. study rates percentage 2001 and