Uni or TAFE? Here's which will get you a higher salary

Lessons around whether students should pursue a university or vocational education have been skewed to encourage more students to head to uni, but that isn’t always the best course.

Research from the Grattan Institute has found that some male students leaving school with low ATARs (Australian Tertiary Admission Rank) would make more over the course of their working life by pursuing a vocational career, however girls will generally find greater earning power by enrolling in university.

• Related story: Are university degrees really ‘worth the money’?

• Related story: 6 new university degrees to prepare Aussies for next-gen jobs

• Related story: Key skills your staff need if you want to build a higher-performing workplace

Instead, nursing and teaching are popular university courses for young women who have graduated school with a low ATAR, and most often provide better financial outcomes than those workers would have received from a TAFE qualification.

“Engineering occupations are male-dominated, often deny women employment, and are inflexible in providing part-time work,” report author and Grattan’s higher education program director Andrew Norton said.

What does this mean?

According to the report, Australian governments need to get better at directing low-ATAR students into the best tertiary education for their skills and needs.

“Especially for low-ATAR men, some vocational alternatives to university are worth considering,” Norton said.

“Schools need to give them better career advice alerting them to these possibilities – and governments should end funding biases against vocational education.

“Like higher education, vocational education has risks as well as potential rewards. A good tertiary education system steers prospective students towards courses that increase their opportunities and minimise their risks. Australia’s post-school system does not always achieve this goal.”

What’s the difference in earnings?

For a male student who graduates with a bachelor's degree after leaving school with an ATAR of 65, his expected lifetime earnings are $2.2 million - nearly $400,000 less than the bachelor-degree median.

And for graduates with ATARs below 65, their earnings will be smaller.

This male student would also earn $30,000 less over their working life than someone with a diploma who achieved the same ATAR.

For women, female bachelor-degree graduates with lower ATARs are predicted to make nearly $400,000 less than the median for female graduates.

They’re expected to earn $1.5 million over the course of their lives.

However, these lower-ATAR students are still likely to earn $120,000 more than their TAFE counterparts.

‘TAFE is as good as uni’

The research comes days after Prime Minister Scott Morrison said “TAFE is as good as uni”, declaring that in many cases it leads to better pay.

“My message to those young people or those who are elsewhere engaged in the technical education system is TAFE is as good as uni,” Morrison said.

“Vocational education is as good as uni, and I’ve got to say some of the people that I’ve met who have been most successful in business, they’ve done it out of a trade and technical qualification.

“We want to really lift the status of vocational education in Australia.”

He said he is passionate about how Australia can support people to become better trained, and support workers to put people through vocational training.

“This is an area, I think, of frustration for all jurisdictions and it is particularly a frustration more importantly for businesses who want to employ people and people who want to get trained so that they can get employed.

“The system at the moment is letting us down on that front, and so it’s important that the Commonwealth and states come together to ensure that it is a far less bureaucratic, a far less public service-driven sector, and it is actually about the needs of businesses who want to employ people and people who want to get trained to be employed.”

Are we too focused on our ATARs to begin with?

Australia’s chief scientist, Dr Alan Finkel this week said Australian students are increasingly choosing their subjects based on what will help them score a higher ATAR.

Speaking at the Australian Association of Mathematics Teachers 2019 National Conference in Brisbane, he expressed concern that the ATAR was encouraging young Australians to complete lower levels of mathematics. This can be a problem when students enter tertiary education.

“[Students] are told, and the university course guides confirm through omission, that the higher their ATAR, the best chance they have of getting into their chosen course at university,” Finkel said.

“But what happens if they attain the necessary ATAR for admission to a university course, but are not competent in the subject content to do well at university, often because they haven’t stuck with mathematics?”

He said schools, students and universities are now overly focussed on the ATAR, to the detriment of actual skills required to succeed at university.

“The ATAR was originally designed to coexist alongside clear expectations and signals from universities about subject choice. Without these signals, the pressure to study subjects that are seen to maximise your ATAR score has increased.

“So while an ATAR score may allow students entry to a course, without a sound understanding of core content, students scrape through, or fail, or drop out. With all the consequences.”

Yahoo Finance's All Markets Summit will take place in the Shangri-La, Sydney on the 26th September and will bring together some of the best minds in business, government, academia and entrepreneurship to examine the most critical issues facing Australia.