Making 'Good' Choices: The Impact of Entitlement Models on Upskilling Later in Life. Research Report

Tailoring education policy to deliver the skills needed by modern labour markets is complicated by the rapid pace of technological change. These complications are amplified when the associated risks of technological redundancy and the lengthening working lifetimes are taken into account. At the heart of the challenge for policy-makers is allocating public funding in a way that improves the responsiveness of the sector to changing skill and labour market needs. This study adds to the existing evidence base on this issue by reporting on the effects of an Australian reform that introduced an entitlement for VET, whereby the availability of public funded VET courses was expanded and where its allocation was linked to student choice. This policy reform was part of the Australian Government's National Partnership Agreement on Skills Reform, established in 2008 to enhance the VET sector's responsiveness to labour market needs. The key premises underlying the reforms were that expanding entitlements to public subsidies would increase participation in education and that, given greater freedom of choice, people would pursue skills in demand by employers. This study tests both of those premises by estimating the effects on enrollments of reforms introduced in the state of Victoria, known at the time this research was undertaken as the Victorian Training Guarantee (VTG). The findings from this study further underline the capacity of people, irrespective of their backgrounds, to make good course choices, given greater freedom to do so, at least as measured in this study. Appended are: (1) VET participation using the ABS Survey of Education and Work; (2) Course participation supplementary statistics; (3) Sensitivity tests; (4) Course choice supplementary statistics.