The stock of qualifications in Australia

Description

Qualifications are seen as important in signaling the skills people have. This report analyses the qualifications people hold in Australia using the ABS Survey of Qualifications and Work. This survey reports on up to five qualifications for individuals. The report looks at the number of qualifications held by Australians across level of qualification and field of education. It also looks at the relevance of these qualifications to people’s work. Finally, six case study occupations are examined to compare the distribution of qualifications among the occupations and their relevance to the person’s current job.

Summary

About the research

Formal qualifications are a key mechanism for skilling the Australian workforce and are underpinned by a robust framework that defines intended learning outcomes in terms of knowledge and skills, and their application. Having an overview of the stock of qualifications in the economy is therefore an important precursor to understanding the available stock of skills, which in turn informs supply- and demand-side issues, such as skills utilisation and skills gaps. Information on qualifications is often collected by labour force surveys or census data, but these statistics typically include only information on the highest level of qualification held, whereby vocational education and training (VET) qualifications are underreported.

This research project estimates and describes the stock of qualifications in the Australian economy using data from the 2018—19 Qualifications and Work survey, compiled by the Australian Bureau of Statistics (ABS). The survey includes data on up to five qualifications per person. Accompanying the report is a suite of infographics summarising the key findings from the analysis, as well as six case study occupations, these highlighting the dynamics of qualifications in different employment contexts. A support document in the form of a literature review provides a broad overview of approaches to measuring the stock of skills in an economy, beyond the analysis of qualifications presented in the main report.

Key messages

• In 2018-19, out of an estimated population of 16.1 million working-age Australians, 10.2 million people reported holding 15.4 million qualifications, including 3.8 million people holding two or more qualifications.
• VET qualifications outnumbered higher education qualifications by almost one million. Certificates III/IV were particularly prevalent.
• Around three-quarters of the qualifications held by employed people were in the same field as, or were relevant to, the worker’s job. Among the 3.3 million people with two or more qualifications who were employed at the time of the survey, about a third held at least one qualification that was not at all relevant to their job; often the most relevant qualification to the worker’s job was either not their highest or their most recent qualification.
• Different qualification profiles were evident in different occupational contexts. Some occupations have more diverse entry pathways than others, with regulation playing a role in some of these pathways.

Executive summary

In this paper, we use data from the Qualifications and Work survey, compiled by the Australian Bureau of Statistics (ABS), to estimate the stock of qualifications in Australia, with a particular focus on vocational education and training (VET). There are several reasons why measuring the stock of qualifications and skills could be useful; for example, in terms of planning, the information gained has the potential to highlight gaps between the demand for and supply of qualifications and skills in an occupation (Gasskov 2018). Such gaps might indicate that more workers with particular qualifications and skills are required in an occupation; or, alternatively, that demand is low in an occupation, enabling the qualifications and skills for that occupation to be used elsewhere.

The analysis focuses on weighted survey estimates for the 16.1 million people aged 15—64 in Australia in 2018—19. Of these, 79% were in the labour force (that is, either employed or unemployed), and 75.1% were employed. Although qualifications are only a proxy for actual skills in the economy, the analysis takes stock of qualifications by level and field of education and other factors, and hence provides some initial insights into the distribution and utilisation of skills in the workforce.

Overall, VET qualifications outnumbered higher education qualifications (7.8 million and 6.9 million, respectively). Certificates III and IV were particularly widespread, at 4.6 million. Overall, management and commerce was by far the most prevalent field of education, at 4.0 million (followed by society and culture, and engineering and related technologies). However, these dynamics varied according to different factors; for example, food, hospitality and personal services; architecture and building; engineering and related technologies; and agriculture, environmental and related studies were all VET-dominant, whereas higher education qualifications outnumbered VET qualifications in natural and physical sciences; education; and health. Sex was also important: females held more qualifications than males overall (52%), and in fields including education; health; and society and culture. Males held many more qualifications than females in engineering and related technologies; architecture and building; and information technology.

An important finding from the analysis is that the number of non-school qualifications far exceeded the number of qualified people, highlighting that many people held more than one qualification. While most other data sources focus only on the highest non-school qualification held, the Qualifications and Work survey provides data on up to five. Including up to five qualifications in the analysis scope increased the estimated number of qualifications held by 34% (30.6% for higher education qualifications and 35.1% for VET qualifications). This approach gives a much more complete picture of the stock of skills acquired through formal qualifications, with these potentially available to the labour force.

Most workers with a completed non-school qualification were either working in the same field as their qualification or considered it to be relevant to their job. This was the case regardless of whether the qualification was at a VET or higher education level (74.9% and 84.7%, respectively). However, almost a third of workers with two or more qualifications reported that at least one was not at all relevant to their job. For many people, their highest qualification was not the most relevant, and for many, their most recent qualification was not the most relevant. Together, these findings point to indirect pathways into work.

While the focus of the analysis was mainly on those employed, the results also showed that many qualifications were held by people who were not working (not in the labour force or unemployed). Accounting for 17.1% of qualified people, this group reflects a diverse yet important cohort for which skills were underutilised in the labour market, emphasising the importance of supporting qualified people who are entering the labour force for the first time or re-engaging with the labour force after a period of absence.

The analysis also demonstrated that many people who did not hold a non-school qualification were employed across occupations at all skill levels, indicating that completed qualifications are just one potential source of skills. Some limited analysis is also included on those currently studying and those with incomplete non-school qualifications, both of which also contribute to the stock of skills.

The report includes case studies of six occupation groups to demonstrate how the distribution and relevance of qualifications varies by occupation. The main point of difference is that some occupation groups had diverse qualification profiles, which suggests multiple pathways to entry (for example, contract, program and project administrators), compared with others with tighter entry requirements (for example, metal fitters and machinists). This finding aligns with previous research showing that trade occupations tend to have a better match to qualifications than occupations with a more ‘generalist’ set of skills (for example, business/management; Wibrow 2014). Some of the case study occupations capture a broader range of jobs than others, meaning that a larger variety of skills may be applicable (particularly in the case of ICT professionals, which was analysed at the ANZSCO 2-digit level). Some occupations have regulations associated with them, either implicit or explicit. This includes construction managers; metal fitters and machinists (which has specific entry requirements); and child carers (regulations relating to the qualifications required for workers).