Discussion paper
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This report presents and analyses a range of statistical information about skills, education and employment trends in Australia’s regions over the period 1991 to 2001. The report identifies that Australia’s qualification levels have risen in line with comparable OECD nations. In 1991, 31% of census respondents had skilled vocational or higher qualifications, while in 2001 the share was 43%. An upward trend in education levels was not mirrored in occupation shares. Although there was considerable change in occupational structures within industry sectors, at an aggregated national level relative occupation shares remained similar between 1991 and 2001. Education levels grew strongly across all regions over the decade, whether they were experiencing income decline or high growth, and particularly strongly in non-agricultural regions and high growth agricultural regions. Some equalisation of results occurred for Major Cities and Inner Regional areas over the decade. This suggests that for more populated regions, skill and qualification outcomes are converging. However, skill and qualification outcomes diminish with remoteness and are significantly lower in Outer Regional, Remote and Very Remote areas of Australia.

As the Australian economy evolves and different sectors take on increasing prominence, the nature of the work involved affects requisite skill levels. In particular, the structures and trends of high–employing industries can play an important role in the aggregate demand for qualification levels at the regional level. Over the 1991 to 2001 decade, all industry sectors experienced growth in shares of university educated workers, and many individual sectors showed variation in their occupational structures. Industry sectors shifting towards more highly skilled occupations and offering fewer relatively unskilled jobs include Mining, Finance and Insurance, and Manufacturing. Meanwhile, Retail Trade and Accommodation, Cafes and Restaurants are two expanding sectors with increasing shares of relatively unskilled employment. However, the net effect of industry changes did not change the relative aggregate occupation shares in Australia, which were similarly distributed between 1991 and 2001.

The report indicates that teaching, health and computing professionals are increasing at or above national employment and population growth rates. However, the representation of each professional category differs across remoteness classes — teaching professionals are evenly distributed, while computer professionals are concentrated in Major Cities and Inner Regional areas. Between 1991 and 2001, only skilled tradespeople shares showed decline BTRE Focus on Regions No.2 x relative to the working age population across most States, Territories and remoteness classes. Much regional science literature argues higher skill and qualification levels to be a central contributor to maintaining economic competitiveness, and a key to building an equitable and inclusive society. In such analyses, shortages of skills may result in sub–optimal growth in the business sector filtering through to the national economy. Unemployment and under-employment are the problematic outcomes of a population under–developed in the skills and knowledge necessary for effective participation in the labour market.

In practice, the links between education, labour quality and productivity are more complex. While many commentators link increasing knowledge levels in society in general with economic growth, other analyses suggest that economic and productivity rates of return on education expenditure begin to diminish beyond upper–secondary school. However, the private and social returns from higher education are unambiguous — individuals investing in university qualifications tend to be employed in higher paid, non–hazardous and secure occupations. Better–educated populations are associated with healthier people, heightened civic participation and volunteering, and lower crime rates. This information paper provides further support to the proposition that there is a complex relationship between increasing levels of education, skills, qualifications and economic productivity and growth levels. Our analysis of income growth and education, skills and qualification levels for labour market regions found mixed results. Overall, regions with higher 1991 shares of university educated residents tended to experience higher income growth over the 1991 to 2001 decade. This pattern was especially clear for non-agricultural regions. However, the relationship between higher education and income growth does not persist indefinitely. Non-agricultural regions with the highest 1991 university-educated shares did not grow income as fast as other regions with lower 1991 shares. The analysis also revealed that regions with high 1991 shares of managers, administrators and professionals — highly skilled workers — showed no clear link with income growth, except in agricultural regions, where high 1991 shares of these workers were associated with income decline. In conjunction with this information paper, BTRE has released an Education, Skills and Qualifications Database. The database contains a wealth of regional data on the distribution of education, skills and qualifications across regions and industries.

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