Education and Employment

Is there a link between educational attainment and employment outcomes?

There are many options when you are leaving school, or are entering or re-entering the workforce at an older age. For some people, the thought of further study is exciting, but for others it isn’t a viable or favoured choice.

Employment and training decisions should be based on a variety of factors including aptitude, interests, expectations of pay and working conditions, training and goals. Higher level qualifications are not immediately attainable, or necessarily the right path for everyone.

This section examines opportunities and outcomes relating to

  • not undertaking post-school school education
  • Vocational Education and Training (VET)
  • apprenticeships and traineeships
  • higher education (university).

Before we explore potential pathways to the labour market, it is worth looking at the relationship between education and employment. There are two aspects to note:

  • An increasing proportion of jobs are for skilled workers.
  • Qualified workers generally do better in the labour market.

Educational attainment is rising

The majority of employment growth over the past five years has been in occupations that generally require post-school qualifications, either through the VET or higher education sectors. This is a long-term trend which is likely to continue, with the vast majority of jobs growth over the next five years projected to be in higher skilled occupations.

Consistent with this, the number of Australians undertaking tertiary training has increased and more workers now hold post-school qualifications. In 2016, 67% of workers held post-school qualifications (up from 58% in 2006). The growth has been for both VET and higher education qualifications. In 2016

  • 31% of workers held a Certificate III or higher VET qualification (up from 27% in 2006)
  • 30% held a bachelor degree or higher qualification (up from 22% in 2006).

Post-school qualifications are beneficial in today’s jobs market

People with higher level qualifications generally have better employment outcomes than those who have not completed further training after leaving school. The chart below highlights the direct relationship between education and labour market outcomes.

Labour market outcomes by highest level of educational attainment, 2016 (%)

Labour market outcomes by highest level of educational attainment, 2016 (%)

Higher qualifications also generally lead to increased real wages. Some lower skilled occupations, though, have relatively high pay, sometimes to compensate for unsociable working hours or difficult working conditions.

Median weekly earnings in main job, by highest level of post-school qualification, 2016 ($)

This bar chart shows the median weekly earnings by highest level of post school qualification. It shows that, generally, those with higher levels of educational attainment have higher earnings. Postgraduate degree $1,500. Graduate diploma or graduate certificate $1,433. Bachelor degree $1,250. Advanced diploma or diploma $1,050. Certificate III or IV $1,020. No post school qualifications $800.

What if I don’t complete further education?

There are job opportunities if you decide that post-school education is not right for you. It is also worth remembering that the option of further study will be available later if you change your mind or your circumstances alter. Tertiary study is not just for young people, with thousands of vocational and higher education students aged in their 30s or older.

Although most new jobs created in recent years (and those expected in the future) are in skilled occupations, there continue to be large numbers of jobs in lower skilled occupations.

In lower skilled occupations (that is, those which do not usually require post-school qualifications), relatively large numbers of job opportunities are created through turnover (workers leaving their occupation for other employment or leaving the workforce altogether). These occupations generally have higher turnover rates than those which require post-school qualifications, and many job openings are available each year.

There are opportunities in all industries for people who do not have post-school qualifications. Large proportions of workers employed in Accommodation and Food Services (55%), and Retail Trade (54%) do not hold post-school qualifications.

Proportion of workforce without post-school qualifications, top 5 industries, 2016 (%)

This bar chart shows the 5 industries with the largest proportions of workers without post school qualifications. Accommodation and Food Services 55%. Retail Trade 54%. Agriculture, Forestry and Fishing 52%. Transport, Postal and Warehousing 46%. Wholesale Trade 41%.

Which occupations do not require post-school qualifications?

Significant proportions of Labourers (60%), Sales Workers (57%) and Machinery Operators and Drivers (56%) do not hold post-school qualifications. Occupations in which many workers do not hold post-school qualifications include General Sales Assistants, General Clerks, Waiters, Checkout Operators and Cashiers, and Truck Drivers.

What is needed to gain employment without post-school qualifications?

There is often strong competition for jobs which do not require post-school qualifications. Previous experience is commonly required by employers and this can be a key barrier for new job seekers. There are, though, a number of strategies which can enhance a job seeker’s prospects (regardless of whether they are applying for an entry-level position, a lower skilled job or a highly specialised job which requires formal qualifications). These are outlined on the Finding a Job page.

Sources: ABS, Census of Population and Housing; ABS, Labour Force; ABS, Characteristics of Employment; Department of Jobs and Small Business, Employment Projections; Department of Jobs and Small Business, Entry level jobs – opportunities and barriers

This chart shows the unemployment rate (primary axis) and participation rate (secondary axis) by highest level of educational attainment. The chart shows that, generally, the higher the level of educational attainment, the lower the unemployment rate and the higher the participation rate. Bachelor degree or higher qualification, the unemployment rate is 3.2% and the participation rate is 87.2%. Advanced diploma or diploma, the unemployment rate is 4.0% and participation rate is 84.6%. Certificate III and IV, the unemployment rate is 4.4% and the participation rate is 85.4%. Year 12 or equivalent, the unemployment rate is 7.0% and the participation rate is 75.9%. Year 11, the unemployment rate is 10.4% and the participation rate is 64.9%. Year 10 or below, the unemployment rate is 10.8% and the participation rate is 55.9%.