ideaCHECK on Universities Australia

Last week, Universities Australia released a commissioned KPMG-Econtech report on funding for Universities. The report’s headline (reported widely) was that an $11b funding boost to high education by 2040 would generated $137.8b in extra GDP. That is quite a rate of return and given that I am in that sector why would I want to question that.

Fortunately, I don’t have to. Two Andrews have done just that. In a blog post, Andrew Norton questions whether it is a forgone conclusion that the government is the only party that can make this investment (e.g., what about the students?). In an ideaCHECK, Andrew Leigh questions the whole modeling exercise even though it is partly based on something the report labels, ‘the Leigh wage premium.’ He wonders if the estimates can really be regarded as ‘conservative’ when the rate of return is nearly twice as high as that promised by Bernie Madoff! Despite that, Andrew found the report somewhat useful.

[By the way, an ideaCHECK is a web publication put out by the Centre for Ideas and the Economy that involves an academic peer reviewing a public report. There are many other ideaCHECKs here.]