Behavioural economics: why do we study at university?

Behavioural economics: why do we study at university?

My friends, the end of the semester is approaching, and there is a distinct lack of motivation in the air. That’s right, final exams are looming upon us, and understandably we are unenthusiastic about it. While I enjoy my studies, I dislike burning the midnight oil, drinking copious amounts of coffee just to stay up late at night to squeeze in that last little inch of knowledge into my brain. In times like these, I wonder why we slave away through the torture that is studying just to get good marks. My friends, why do we put up with this? Why do we choose to study at university?

Some critics of higher education view the pursuit of university degrees as a waste of time. They argue that instead of studying, it would be much better to work full time straight after university, in industries such as construction or mining.  After all, a university education is expensive at a cost of roughly $9,000 annually, and it can cost a lot more when postgraduate degrees come in to play. With the advent of university deregulation, education experts forecast that future university students will have to fork out even more money for their education. Instead of burdening oneself with HECS debt, it does make sense to finish high school, get a full time job straight away and enjoy the money.

At first, I was sceptical about this idea. As a university student, I came to university in the belief that I would be earning good money as an employed graduate once I finish my degree. Unfortunately, the current economic climate of Australia does not support this belief. As Australian universities churn out thousands of graduates each year, there is an oversupply of labour in the economy and sadly not every graduate gets a plush job at the end. The most recent survey by Graduate Careers Australia show that only 70% of university graduates are employed full time 4 months after they finish studying. This issue gets much worse in specific courses such as arts, environmental studies and even law. Does this mean that we should abandon the quest for knowledge and focus on building early financial wealth instead? I certainly don’t think so. While all of us have different circumstances and reasons for why we pursue higher education, there are certain benefits that can be gained from attending university.

As a person’s upbringing and experience influences his or her decisions, it can be said that cultural and societal factors play a part on whether a student attends university. A recent study by the NCVER shows that parents who pester their kids to go to university greatly increases the chance of the student attending university, compared to students whose parents who did not do so. Other factors which improve the chances of a high school student attending university include the quality of education they receive in high school and their cultural identity. I found that students, whose parents come from a country that values education and academic smarts (such as China and India) have increased chances of attending university. I cannot speak for others, but having migrated from Indonesia, I was pushed by my parents to study hard at school, so I can go to a good university. It is clear that these factors accentuate to a high school student the value and benefits of attaining a university degree, which no doubt influence their decisions.

The most logical reason that influences people to study at university is the possibility of earning big money. Jobs in industries that pay well, such as investment banking and law require job applicants to possess a certain standard of knowledge and experience, which includes a university degree. As I have discussed before, unfortunately not every university graduate will be able to get into those coveted jobs. If that is the case, should the average high school student be better off by working straight away after high school? The data by NATSEM suggests otherwise. It found that on average, annual salaries of people with a bachelor’s or a postgraduate degree are higher than those who did not undertake higher education. The most striking fact is that on average, a person who has a bachelor’s degree will earn around $2.9m over their lifetime, 1.7 times the projected earnings of a person with just a Year 11 education. Clearly, a university education is still a very safe bet for people who aspire to be financially wealthy during their lifetime.

Apart from increasing lifetime earnings, attaining a university degree can also improve a person’s general wellbeing and happiness. As the extra knowledge that students learn at university generally translates to a higher chance of getting a job in the marketplace, university graduates in theory will be happier as their chances of being unemployed are lower. Additionally, studies by the OECD shows that individuals who attain university education live longer, participate more in volunteering activities and show greater trust in others, all signs of happiness and well-being. While university students don’t usually think of happiness as their main reason of attending university, it seems that the average student reports a higher level of happiness in university, compared to when they were in high school. Whether it comes down to a greater amount of freedom or other factors, a higher level of happiness will result in increased welfare, which is always a good thing.

For some university students, their studies can impact the overall productivity and wellbeing of Australians in a positive way. For example, the bionic ear, an invention by Graeme Clark, assists the hearing of deaf people, which improves their productivity. Graeme Clark wouldn’t have come up with this invention had he not attended Sydney University to study medicine. Dr Mark Lidwill and Edgar Booth, both university-educated men, made a huge breakthrough in creating the first artificial pacemaker in the world. This particular invention made way for better models, which have helped the general wellbeing of people who suffer from heart conditions. Without the research capability that universities provide, countless inventions that we use today to improve our lives would not exist.

In the end, all humans have unique characteristics and personalities, and not everyone decides to pursue higher education. However, it is clear that university education provides immense value to those who undertake it. As a university student, I believe that higher education is the key to improve the overall wellbeing of the Australian population, and I encourage all of us university students to persevere with our studies, especially during this stressful exam period.

PS: All the best for university exams everyone! May the study gods be with us.