Mining boom’s education fallout

ALMOST 75,000 more 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, the 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 WA 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.

“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 full-time study followed “remarkably similar” trends across all states and territories, the paper says.

This changed after the onset of the mining boom.

“The gap between the mining and non-mining states’ full-time study rates widened by 6 percentage points between 2001 and 2012. This divergence is statistically significant and large.”

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.”

The RBA paper notes that workers in the resource industry did benefit from onthe-job training and says: “Those students who made the decision to defer or abandon their studies as a result of the mining boom may be those who would have benefited the least from university anyway.”