Non-technical summary:
Despite evidence that university participation enhances labour-market prospects, there are growing concerns about unequal returns to university for graduates from advantaged and disadvantaged social backgrounds. In this study, we overcome the methodological limitations plaguing earlier studies by leveraging large-scale linked administrative data covering the full population of individuals graduating from Australian universities over the 2005-2011 period. Capitalising on this unique and powerful data, we examine differences in the labour-market trajectories of graduates from multiple social backgrounds. We track both their employment earnings and the amount of unemployment benefits that they received. Our findings reveal higher returns to university education over the first 10 years post-graduation amongst graduates from advantaged social backgrounds compared to their peers from more disadvantaged backgrounds. However, there was substantial heterogeneity in graduates’ earnings and unemployment-benefit receipt both across groups and over time. Compared to their advantaged counterparts, graduates with a disability and from non-English speaking backgrounds experienced the worst outcomes, whereas graduates from low socio-economic status backgrounds and regional, rural and remote areas fared comparatively well. Indigenous graduates experienced inconsistent outcomes that changed markedly with time since graduation.
These findings bear important implications for policy and practice. First, they demonstrate that inequalities observed at the access and participation stages of the student life cycle extend well beyond university graduation, underscoring the need for urgent policy attention on that phase. Second, they reveal significant heterogeneity in the extent to which graduates from different disadvantaged groups experience difficulties in the labour market—indicating that focused policy approaches and targeted support that recognise different experiences across groups are preferable over more general, ‘broad-brush’ approaches. Finally, they reveal considerable reliance on unemployment benefits across graduates from different socially disadvantaged groups—highlighting the importance of building up employability skills for these graduates as part of their university experience. At a broader level, our study serves to showcase the power of leveraging novel data sources (in our case, linked administrative datasets) and deep cross-sectoral partnerships (in our case, Government/Academia) to improve the stock of evidence-based knowledge on the intersections between social background and education.