Adelaide University study shows declining wage premiums in Australia

Research from Adelaide University indicates a progressive decline in the wage premiums associated with higher education (HE) and vocational education and training (VET) in Australia. Analyzing 24 years of data from the Household, Income and Labour Dynamics in Australia (HILDA) survey, the study tracked over 250,000 observations between 2001 and 2024.

While HE degree holders still maintain an average hourly wage premium of approximately 46 per cent, the year-by-year analysis shows a peak in 2010 followed by a steady decline. In 2010, HE graduates earned about 53 per cent more than those with Year 12 or lower qualifications; by 2024, this premium fell to 38 per cent. VET qualifications saw a more significant drop, with hourly premiums falling from a 14 per cent peak to just 2 per cent in 2024.

The decline is even more pronounced when examining weekly earnings, which factor in both hourly rates and total hours worked. The weekly earnings premium for HE graduates fell from a peak of 71 per cent in 2008 to 40 per cent in 2024. Lead researcher Dr Tinh Doan attributed the erosion of weekly earnings to factors such as underemployment, reduced work hours, a rapid increase in post-school graduates, and structural shifts toward lower-productivity sectors.