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FactCheck: is tertiary education of private benefit?

Written by Tim Pitman and Reviewed by Gwilym Croucher for The Conversation

“I’ve always argued that tertiary education is a private benefit, I’m happy for taxpayer funding of primary and secondary education but tertiary education results in a higher salary.” – Senator David Leyonhjelm, Liberal Democratic Party, RN Breakfast, 28 January, 2015.

Senator Leyonhjelm’s statement reflects an oft-repeated argument that the benefits of tertiary education predominantly flow to individuals, but does not present the whole picture.

The Senator has previously said, for example, that:

“When you receive a benefit in the form of a higher salary throughout your career, then it’s a private benefit and it should be paid for in a private capacity.”

That higher education results in private benefit is a fact widely supported by research. For example in 2012, the Grattan Institute calculated that “the median male bachelor-degree graduate is more than A$600,000 better off compared to the median year 12 completer who does no post-school study.” For women, the figure was A$800,000.

While other studies proffer different figures, the consensus is that higher education results in particular benefits to individuals.

Significant public benefit

However, it is equally true that higher education results in significant public benefit. In economic terms, university graduates earn, on average, higher salaries and therefore pay more tax over their lifetime. The same Grattan Institute report found that, “using the 2006 Census, the median female graduate is estimated to pay around A$240,000 more in tax. The median male graduate pays about A$360,000 more in tax over his lifetime.”

Furthermore, higher employment rates mean that university graduates rely less on public welfare. There is also a positive relationship between education and health.

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Posted 29 January 2015 Posted in Editorial, General