HECS magic: but there’s less wizardry for women

Mathias Sinning has crunched the numbers on gender based earnings to discover HECS delivers for society as well as students, just not equally for everybody.

“HECS is particularly interesting from a public policy perspective because the scheme reduces economic inequality while potentially contributing to economic growth. Tax and transfer policies that aim to reduce economic inequality (such as social welfare payments) typically contribute to lower economic growth,” Professor Sinning (ANU) writes in a new collection of papers.

But the spread of good news is not equal. Professor Sinning crunched the HILDA numbers for 2001-2014 and found:

# men with a postgraduate degree have lifetime earnings 83 per cent over males whose top qualification is Y12 but the difference for women in the two groups is just 50 per cent

# women with a bachelor degree, even with honours, earn as much over their working lives as women with PG qualifications

Even more alarming for everybody who wants Australians to skill-up he finds;

# “women have no benefits from investing in vocational training

# Overall women are not as likely as men to repay their HECS debts; the average outstanding debt of male university graduates converges to zero over a 30-year period, whereas the average outstanding debt of female university graduates remains positive, indicating that many female university graduates in Australia do not have the financial capacity to repay their student loans in full.

“This result is remarkable because it implies that a considerable number of female university graduates rarely or never cross the minimum income threshold that would require them to repay their student loans,” he writes.

But this is not a negative for the higher education loan system. “The contributions of HECS to social mobility are likely to outweigh any potential negative side effects on work disincentives of female university graduates.”

Mathias Sinning, “Gender differences in costs and returns to higher education” (in) Miranda Stewart (ed), Tax, social policy and gender: rethinking equality and efficiency (ANU Press, Nov 2017 )


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