Bulletin

Issue: April 2006

Research in Action

Missing out on higher education because you’re poor you get the blame - but should you?

Question: Why don’t poor kids go to university as much as rich kids?

Answer: They don’t have the money, or that’s what many people assume.

But is this the only factor?

A highly qualified team with economics and social science expertise has been granted an ARC research grant of $240,000 over three years to identify factors that prevent or discourage students from lower socio-economic backgrounds from participating in tertiary education.

According to one member of the research team, Dr Buly Cardak, senior lecturer in La Trobe University’s Department of Economics and Finance, the research is motivated by international findings that students from lower socioeconomic backgrounds are up to half as likely to go on to post-secondary education.

One of the issues on which the project hopes to focus is that, along with the cost of university education, students can be excluded if their early schooling achievement is not sufficiently strong. An important question for understanding university participation is what factors affect this earlier school achievement?

The project aims to consider the roles of student ability, family background and school quality as factors influencing educational outcomes and a student’s capacity to progress to university. Apart from Dr Cardak, other team members are Professor Bruce Chapman, Research School of Social Sciences, ANU, and Professor Vance Martin, Department of Economics, University of Melbourne, with involvement by Dr Chris Ryan also of the Research School of Social Sciences, ANU.

Dr Cardak says the project has three broad aspects. The first is the development of new theoretical economic models which can explain the variation in participation rates by socio-economic status.

The second is to test these models using simulation based estimation techniques with Australian and international data and the final objective is the evaluation of alternative policies targeted at improving equality of opportunity.

One of the key aspects of the theoretical analysis is the development of models of education that account for the fact that progress to later stages depends on outcomes in earlier stages.

Intuitively, this is quite straightforward. Students cannot move on to the next year level of schooling unless they pass exams or satisfy some progress requirements.

However in the economics literature, models of education have not included such multi-stage aspects of education. Using such a model allows researchers to consider what happens in earlier stages of education, like secondary and primary school and even earlier, and identify if factors other than being able to pay university fees are operating to hinder or discourage students.

The statistical aspects of the project will be based on existing longitudinal studies of youth in Australia, the USA and UK. Simulation base estimation is a relatively new technique and particularly useful for such problems as raw student abilities, an important aspect of the project, which are never observed.

‘However, this technique allows us to estimate the role of important factors with the use of auxiliary models where raw student ability may be absent,’ Dr Cardeck said.

‘Statistically identifying the relative importance of factors such as student ability and family background in determining educational success will enable families, schools, universities and educational policy-makers to improve opportunities for high-ability students from all socio- economic backgrounds.

‘Once we have statistical estimates of the importance of these factors, we can use the data to assess different policies by extending our theoretical models and using numerical simulation techniques. This might include an assessment of the impact of the HECS scheme, scholarships based on socio-economic status and fully subsidised university education.’

An important objective is to provide guidance on how to provide better opportunities to the most able students, whatever their socioeconomic background. Policy suggestions may include improving resources at the pre-primary, primary and secondary school levels to facilitate the progress of talented students on to tertiary education.