Do some private schools harm job prospects?

Several developments in recent months suggest that a long-term trend towards private school education in Australia may have plateaued, or even be in decline.

Whether that’s a good or bad thing will no doubt be a matter of bitter debate -- of the pre-election promises thus far broken by the Abbott government, few come close to generating the public outrage over the ‘Gonski double backflip’.

For those who were asleep at the back of the class, that involved promising to be on a ‘unity ticket’ with Labor with regard to the implementation of the needs-based funding model for all Australian schools worked out by investment banker David Gonski.

Initially, education minister Christopher Pyne thought it possible to walk away from the commitment and return to the flawed Howard-government era ‘socio-economic status’ funding model.

However, after a huge community backlash, Prime Minister Abbott intervened to guarantee that the Gonski funding model would be funded for four years, rather than Labor’s six.

That time-frame takes the government past the next election, but does not neutralise this highly emotive topic. Labor will undoubtedly run strongly on that theme at the next election.

In the meantime, however, questions are being raised about the independent and Catholic school systems in general -- the schools that, according to Labor, were often privileged in funding terms by the Howard system.

The first of these questions relates to the long-term trend of parents moving students from government sector to the private system.

Between 1970 and 2010, the proportion of Australian school students within the private system grew from one-fifth to one-third.

A great acceleration in that process occurred in 2001 when the Howard government expressed a strong predilection for the marketisation of school education as a way of providing greater ‘choice’ for students -- including, it said, low SES students.

Thus independent and Catholic schools received funding based on the average SES scores of the students attending.

However, this came with the important political proviso that ‘no school will be worse off’ under those reforms. So schools whose funding levels were too high on the SES criteria, got to keep their extra funding, indexed, ad infinitum.

The fact that pre-2001 and post-2001 independent schools in the same neigbourhood could receive different levels of funding was one reason the Gonski reforms were initiated.

The idea of Gonski, in the words of senior lecturer in education at Monash University, David Zyngier, was not only to iron out that discrepancy, but to create a funding model “blind to sector [that] funds students and schools according to need.”

During the increasing affluence of the late Howard era, parents increasingly saw sense in sending their kids to private schools -- the wealth effect of a property and share market boom, plus the terms-of-trade and income boosts of the mining boom helped that process along nicely.

However, by July of this year, a website appeared that sold off places in private schools at a discount of 10-40 per cent to normal fee-rates.

That may be an early tremor.

Several news articles have raised a second big question in the public/private debate in past months: what are high fees for private schools buying the students involved?

A couple of recent studies suggest ‘not much’.

First came a study from the Australian Institute of Family Studies that found NAPLAN results in years three and five were not affected by which kind of school a student attended.

Then this month new research was released by Jenny Chesters from the University of Canberra, that suggests no link between attending independent/Catholic schools and better jobs outcomes.

One interesting finding of the Chesters study was that students from the Catholic system ended up in more prestigious roles.

She notes: “After taking into account the effects of level of education, sex and age, having attended a Catholic school is associated with higher, on average, levels of occupational prestige than having attended a government school. On average, attendance at an independent school is not associated with higher levels of occupational prestige.”

The ‘prestige scale’ used across the social sciences in Australia, and by Chesters in this study, is from the ‘Ausei06’ grading scale which measures “the social standing or desirability of occupations. They are typically generated from the normative judgements of panels of experts or population samples on the prestige of selected occupations.”

Importantly, the data set from which Chesters drew her study -- the huge longitudinal Household Income and Labour Dynamics in Australia study -- includes both ‘jobs’ and ‘self-employed’ (i.e. business owners) when it asked respondents about their work outcomes.

If job outcomes really aren’t what parents assume, then is extra ‘prestige’ enough? Students from the private system are more likely to get into the Group of Eight universities, but if that does not eventually translate into better job outcomes, was the huge private expense worth it?

Chesters even suggests that: “The massive growth in the number of private schools since the 1990s may be having the effect of diluting the advantages perceived to be attached to private schooling.”

If that were true, and if the parents rushed back into the government system, the strains on the federal budget would be immense.

Another way of reading Chesters' study is that averaging out the low-fee private sector schools with 'elite' schools produces outcomes broadly similar to the government system. That might be unsurprising to many, but it would point to the fact that parents paying the lower fees (which are still a big hit to the family budget), may actually get worse outcomes than if their kids went to the local government school.

As Australia tightens its belt for an epic shift away from the mining and housing-finance booms of the past decade, household budget strains may cause parents to rethink the fees they pay into the private system.

Or, as is already happening to a degree, we may see much more growth in the low-fee part of the independent/Catholic systems.

One thing the Chesters study doesn’t consider is the fact that some government schools, by virtue of the price of real estate in their catchment areas, may function as social-economically selective schools anyway.

It would be interesting to see how kids from the government schools in the most well-off areas perform in the jobs markets -- a study for another day, perhaps.