Think back to university or senior high school. Can you remember what you learnt? How often have you directly utilised those concepts in your career to date?
I completed a BSc (Chemistry & Physics) from The University of Western Australia and quit a BA (Politics, Philosophy and Economics) at Oxford University. I have worked at a: chemical company, management consulting firm, university research lab, government research lab, education charity and tech company. I am yet to observe any productive benefit in the working world, apart from the skill of research.
Unsurprisingly, economists have undertaken a number of studies to determine whether signalling or the human capital theory best explain the benefits of taking several years out of the workforce to study (further reading here, here and here). Signalling allows employers to rapidly determine the approximate quality of job applicants and employees with the opportunity to differentiate themselves in order to negotiate higher wages. The human capital theory makes the case that lectures, tutorials and examinations not only provide a powerful signal but that they increase productivity.
The answer to the question not only has direct implications for the individual financing their own studies but for the entire society by accepting the long absence from the workplace and – in the case of social democracies like Australia – a significant subsidy from the taxpayers, when over 50% of the population do not obtain tertiary qualifications themselves.
Brand loyalty has provided the popular universities in the world with the liberty to ignore teaching entirely as they are guaranteed enrolments regardless; rarely do they employ specialist teaching staff or provide staff (who are often in the career to research not teach) with any incentives to teach well. The University of Western Australia, for example, did not even bother with advertising campaigns for prospective students until the turn of the century.
In order for a university to maximise their revenue they look to build their international ranking and increase funding from the private sector and government. When the major ranking systems (ARWU, Times Education and QS (Quacquarelli Symonds)) have research-centric methodologies and major fundraisers tie their commitment to research output, quality of courses and teaching is left forgotten.
A lower mark at a prestigious university is often seen to be better than a higher mark at a less prestigious university.
Social democracies like Australia utilise subsidies and regulation to ensure there is no significant price differential between universities and that finance available to all and does not require repayment until the student is full-time employed. Without a cost component students would rationally select an institution based on the average earnings yielded from their course of choice. Employers routinely discard CVs if the student has not studied at a prestigious university. A lower mark at a prestigious university is often seen to be better than a higher mark at a less prestigious university.
Now imagine for a second the public outcry if universities based their selection upon the prestige of a high school rather than the mark obtained by the student! Many universities do the exact opposite: they give preference to students from the less prestigious schools with the same marks because their investigations have shown these students perform better on average at university. The majority of high school systems in the developed world utilise an independent government body such as the School Curriculum and Standards Authority (SCSA) to enforce standardised tertiary entrance examinations and recommend a curriculum to adhere to. A simple low-cost intervention which addresses the imperfect information problem and yields a more efficient market.
Universities can select the best students based entirely on performance with no thought as to the prestige of their high school. Parents and high school students can easily access the average tertiary entrance examination scores and thereby make an informed decision on school enrolment incorporating geographic proximity and cost rather than solely basing the decision on prestige. Consequently schools are forced to compete and ensure the highest possible average tertiary entrance exam score by providing the best teaching. This system could easily be extended to universities, forcing all students to sit standardised final exams set by the SCSA. Thereby employers would assess students solely by interview performance and final exam score rather than prestige of the university. Students would be able to base university selection decisions on average final exam score rather than prestige.
To enhance the decision-making process made by students in selecting universities, a degree of deregulation is also required. If universities could set their course prices it would enable the less prestigious universities to undercut. Students would then also take cost into account when making their decisions and then be further inclined to select universities based on final exam score average rather than prestige. However if deregulation came before an independent authority to set examinations it would simply allow the prestigious universities to take advantage of the inelastic demand for their courses and fail to address the brand loyalty problem.
Students would then also take cost into account when making their decisions and then be further inclined to select universities based on final exam score average rather than prestige.
The majority of graduate employees undertake laborious and costly grad programs to develop the skills required in their workplace. The majority of courses do not provide any practical experience component, with medicine, nursing and teaching being the key exceptions. The undergraduate degrees were originally designed to produce researchers prior to tertiary education being affordable to the wider society. The University of Western Australia and Australian National University have developed special programs for those interested in research – a Bachelor of Philosophy. Therefore all other undergraduate courses need to be reformed to meet the needs of the average employer.
This can be undertaken simply by ensuring the appointment of SCSA head examiners is undertaken by the employers. Employers would be given appointment powers based upon the number of graduates from that discipline that they employ. BHP Billiton might employ 10% of the engineering graduates in Australia; therefore they would receive 10% of the board, which appoints SCSA head examiner in engineering. Thereby both examinations and recommended curriculums would be brought in line with the needs of the employers. Compulsory internships and one day per week work experience are examples of the reforms that could be implemented by the SCSA.
Unfortunately in recent years the universities have increasingly taken advantage of the market imperfections and encouraged students to spend more money and time at university via double degrees and masters programs. It’s time that the gravy train is stopped and prestigious universities face a more competitive sector with better informed employers and students. Productivity gains, reduced education prices and shorter courses would lead to better outcomes for the entire society. No longer should graduates enter the workforce with minimal practical skills after investing a great deal of money and time into their studies.