Opinion & Commentary
HECS not putting hex on parenthood
Topical issues give new impetus to old agendas, and opponents of university fees are using concern over low and falling fertility to bolster their case.
Just last week, Labor’s Shadow Minister for Education, Jenny Macklin, repeated her assertion that student debt is delaying parenthood, and the Council of Australian Postgraduate Associations claimed that increasing student debt would jeopardise future population growth.
The argument is easy enough to state. As most graduates now enter the workforce with debts from the Higher Education Contribution Scheme (HECS), and repay between 3% and 6% of their income each year until their education debt is cleared, they have less money to spend on other things, children included. As a result, the first birth is postponed, and for some women delays may mean that they never have children.
While the theory is clear, the evidence is weak. It’s true that university educated women, on average, have fewer children than women with vocational or school education. But this is true for older women who never incurred HECS debts, as well as for younger women who did. This suggests that other factors explain the different rates of childbirth.
Census data hints at one reason for the low average number of children. As of the 1996 census, university educated women in their forties with partners were averaging a little over two children each, near enough to the average 2.1 children per woman needed to replace the population.
For this generation of women, what pushed the average for all educated women down was the number of unpartnered women. Unsurprisingly, women who were never married or were separated had fewer children than those with partners.
Reasons for marrying or not marrying are obviously very personal, so we can only draw inferences from social statistics. It seems though that a shortage of suitable fathers has something to do with the low birthrate. Most university educated women are married to university educated men, but there are too few such men to go around. For university educated people in their forties, there are thousands more unpartnered women than there are unpartnered men.The men of this generation, at least, were happier than women to choose a spouse without a degree.
Unless qualification matching becomes less important to choosing a partner, this shortage of university educated men is only likely to get worse. In the late 1960s and 1970s, when people in their forties in 1996 went to university, there were more male students than female. Since 1987 women have been in the majority on campus, and by 2001 they outnumbered men by more than 70,000.
Fiddling with HECS can do nothing to help this marriage market mismatch. What we need are better school results from boys to achieve gender balance at university, and greater comfort with marriages in which the wife has the higher income.
The educational difference between childbirth rates is most obvious for women in their twenties, consistent with the HECS delays children theory. It’s also consistent with people in their twenties wanting to establish professional careers, travel, and enjoy an affluent lifestyle before setting down to raise a family. One survey of people aged 25-34 without children found that most nominated as the reason dislike of children or lifestyle reasons, not money.
That HECS is a neutral factor behind delayed childbirth is supported by the 2001 census. It found that university educated women aged 25-29 in 2001, all of whom would have been liable for HECS, had the same average rate of childbirth as university educated women the same age in 1996, when most had no or only a partial HECS debt.
Even if the 2006 or 2011 censuses show a possible link between HECS and fertility, it doesn’t mean that we should reduce student debt. While fertility is lowest among university educated women, fertility decline is a general problem. It follows that if financial difficulties delay children, non-graduates are more affected than graduates. Even after HECS repayments the average graduate aged 25-34 still brings home around $8,000 more a year than the average person with a Year 12 qualification.
If we are looking for government-imposed financial burdens that affect people in their childbearing years, stamp duty on first home purchases is a more obvious candidate than HECS. In Melbourne or Sydney stamp duty can cost as much or more than a degree. Most first home buyers incorporate stamp duty costs into their mortgage, on which, in contrast to HECS, there are variable interest rates and no repayment holidays during times of low income.
Unlike reducing student debt, lower stamp duty on first home purchases would target all those likely to have children, and assist those who most need the extra money, as well as those who need it the least.
Andrew Norton is a Policy Analyst at The Centre for Independent Studies and author of The Unchained University.
