Where to next? Graduate outcomes from the Australian higher education and vocational education and training sectors

This report analyses the education and training outputs and outcomes of the Australian higher education and vocational education and training (VET) sectors. By 'outputs' we mean the education and training services and products provided by the sectors to other persons or entities, while by 'outcomes' we mean the effect of completion of a course provided by a sector for its clients. We use evidence on the post-course activities of a sector's clients as indicators of its outcomes.

We review the relevant data collections of the two sectors, finding that the outcome data from the sectors' graduate destinations surveys provide a better basis for comparisons than output data from administrative collections. In the main, we use data from the published national sources for the destinations of 1997 graduates in early 1998 to address the research questions in this study. In addition, we analyse individual-level graduate destination data from one metropolitan multi-sector institution. This allows us to control for individual differences that influence these outcomes, as well as minimising the effect on the comparisons of potential differences in teaching approaches, facilities and student services across the sectors.

The key research questions addressed in this report are set out below, along with a summary of our findings on each point.

Which courses appear to have the best employment outcomes and why?

• In terms of aggregate outcomes, there are not substantial differences between the percentage of graduates from each sector employed following their courses (over 70% in both sectors - sections 4.2 and 6.3). This similarity remains when we take account of individual differences, including graduates' pre-and within-course employment activities.
• In both sectors, the employment outcomes are better for those completing higher level qualifications (section 4.2).
• Graduate employment outcomes by broad field of study tend to be similar in the two sectors. Graduates from architecture and building, engineering and health, and community service courses tend to have above-average employment outcomes, while those from humanities and science tend to have below-average employment outcomes. The employment outcomes for some technical and further education (TAFE) multi-field qualifications are very low (section 5.2).
• Graduates of higher education courses obtain jobs in different occupations from those of VET courses. Higher education graduates are concentrated in professional occupations (two-thirds work as professionals), while VET graduates are more evenly distributed across occupations-although many (one-third of them) work as tradespersons (section 4.3).
• Graduates of higher education courses obtain higher paid jobs than graduates from VET courses. However, at least some of this difference appears to reflect the differing occupational distributions of the two sets of graduates (section 4.4).
• TAFE graduates' employment outcomes are influenced by the regional labour market where they lived, whereas higher education graduates' are not. Employment outcomes are higher among Australian-born TAFE graduates, but not higher education graduates (section 6.3).

To what extent are education and employment outcomes linked to the prior education and employment status of the student?

• The prior education qualifications and employment experience of graduates are important determinants of their post-course outcomes. Graduates with prior full-time work experience have better employment outcomes than those who were not working full time before their course. However, holding a previous qualification did not improve graduates' employment outcomes, and may possibly have harmed them in the case of females. This latter effect may arise if employers treat an under-utilised initial qualification as a signal of previous potential employers' assessments of individuals (sections 4.2 and 6.3).
• Those with employment experience during their courses, primarily full time, had better employment outcomes than those who did not work (section 6.3). In like manner, those undertaking courses with a significant, structured work experience component had better employment outcomes than those from other courses (section 6.3). Both this effect and the within-course employment effect operated independently of individuals actually remaining with the same employer.
• Individuals with previous qualifications were more likely to continue with further study in the year following completion of their course (section 6.4). A higher proportion of VET graduates undertook a further course than higher education graduates (39% compared with 27% - sections 4.2 and 6.4).
• Individuals' experiences in their course, as reflected in their course experience questionnaire (CEQ) responses, influenced their subsequent course participation. For example: - those higher education graduates who undertook a further course, but were unhappy with the assessment methods in their previous course, were more likely to change institutions to continue with their studies - females who were studying and were satisfied with the teaching approach in their course did not change institutions (section 6.4)
• TAFE graduates who had a poor assessment of their course's employment role and who undertook a further course of study for a higher level qualification often did so in new fields of study

Are the outcomes for specific social groups similar in each sector?

• Employment outcomes for males are quite similar between the sectors, although the graduates of the two sectors work in different occupations and higher education graduates earn more (sections 5.2 and 6.3).
• Females have quite different employment outcomes from the two sectors. Female higher education graduates enjoy employment and occupational outcomes that are similar to male graduates, though they get paid slightly less (sections 5.2 and 6.3). By contrast, female VET graduates experience much lower employment outcomes than male graduates (13 percentage points lower section 5.2), apparently reflecting both their concentration in poorer performing fields of study and their lower pre-and within-course employment rates than males (section 6.3).
• Males and females continue with further study in the year following completion of their course in broadly similar numbers within the two sectors (sections 5.2 and 6.4).
• Older graduates have poorer employment outcomes than younger ones and, among higher education graduates, were less likely to continue with further study in the year following completion of their course (sections 5.2 and 6.3). Some specific groups of TAFE graduates, notably young male graduates who completed trade-related qualifications, appear to have low continuation rates.

What are the limitations of cross-sectoral comparisons of outputs and outcomes?

• There are two main limitations of comparisons between the sectors and one limit on our ability to undertake them. We are limited by the comparability of the data. This is more of an issue for comparing the outputs of the sectors than the outcomes, though even the destination surveys of the sectors contain important differences in data definitions. In addition, the presentation of the destinations data is quite different between the sectors. The presentation style of the higher education publications supports 'yardstick' competition between institutions, while that of the VET sector gives greater emphasis to the outcomes of different client groups and of those completing different qualifications.
• The first limitation to the act of comparing the sectors is that they may be fundamentally different in terms of their objectives and activities. That does not appear to be the case here. The differences in the national destinations data of the sectors appear to be no greater than those found in the data of the single institution we analyse, where the higher education and VET departments are integrated within the same faculty management structures.
• The second limitation in comparing the sectors is that the performance measures used in both sectors might be inadequate. It could be that neither sector provides a satisfactory benchmark. Where one sector performs better than another in some dimension, its performance may still be unsatisfactory against some external criteria. Since graduate employment outcomes are the major focus of this report, we use a longitudinal survey by the Australian Bureau of Statistics (ABS) of the employment outcomes of individuals seeking work in the broader labour market as an external benchmark. The ABS study tracked these job seekers over a two-and-a-half-year period.

In general, the employment and occupational outcomes of graduates exceeded those of the ABS job seekers. However, TAFE graduates who were unemployed or not in the labour force before their course had poorer employment rates than the ABS job seekers, but higher rates than the most disadvantaged groups of ABS job seekers (section 4.2).

Implications for research

The findings in this report point to three directions for research. The first is to determine how representative the findings from the analysis of the data from one institution are for the sectors more generally. This would require repeating the type of analysis undertaken here for larger samples from the national destination surveys.

The second direction is to look in a more detailed way than has been done here at the role of student experiences, as measured by their CEQ responses, on their subsequent education participation. While institutions' CEQ scores from the destination surveys form part of the discreet yardstick competition for new students now prevalent among higher education institutions, they also reflect the assessments of a significant continuing market for institutions' courses. Knowing what factors are important in continuing students' choices between institutions, course levels and fields of study is obviously of considerable importance to institutions in focussing improvements in their courses in both sectors. Identifying strategies to increase further participation among low-continuation groups of VET students could also help that sector.

The third direction for research is to identify factors that might improve the employment outcomes for women in TAFE. Identification of successful strategies within institutions that improve those outcomes could assist other institutions in lifting female outcomes more generally. One approach presently pursued by women who are dissatisfied with their courses' employment role in TAFE is to undertake higher level courses in different fields. This strategy appears unlikely to succeed since other results presented here suggest that having an unutilised previous qualification does not add to, and may detract from, female employment outcomes. The poor employment outcomes for previous qualification holders is reflected more broadly for males and females in the national TAFE data, so it may well be a problem for other disadvantaged groups in the VET student population.

Policy implications

There are four main implications for policy from this report. First, existing government subsidies to the higher education and VET sectors allow the operation of sectors from which graduates obtain employment at better rates than those found by job seekers in the broader population. This supports an argument for maintaining these subsidy levels to the sectors.

Second, if the employment outcomes of the sectors are similar (leaving aside differences in occupational outcomes), but the marginal cost per place are not, and broad employment outcomes are the primary objective of governments, they could allocate marginal funding towards the least cost sector.

Third, post-course employment outcomes for graduates can be improved by assisting students into employment activities during their courses. Both actual employment during their courses, either full or part time (among higher education students), along with structured work experience through sandwich years, appear to improve employment outcomes, independently of students remaining with the same employers. This experience could be facilitated through either a restructuring of courses to include a work experience element or the re-direction of student employment services towards facilitating within-course employment.

Fourth, employment outcomes for some groups in TAFE require considerable attention: notably females and those individuals who complete TAFE multi-field of study courses. Once more, the development and/or re-direction of student employment services towards facilitating within-course employment might improve those outcomes. Such services are often poorly resourced within TAFE institutions.