Human Settlements Theme Report

Australia State of the Environment Report 2001 (Theme Report)
Lead Author: Professor Peter W. Newton, CSIRO Building, Construction and Engineering, Authors
Published by CSIRO on behalf of the Department of the Environment and Heritage, 2001
ISBN 0 643 06747 7

Urban stocks and processes (continued)

Population, households and human capital (continued)

Human capital

An important urban stock is the nation's human capital, reflected by levels of education and training and labour force skills. (A range of other indicators, including the multicultural mix of Australia and its immigration policies, are dealt with by Birrell (1996).) The ability to harness the benefits associated with the so-called 'new economy' is tied to a nation's ability and opportunity to develop its human capital. The International Monetary Fund (1997, p.59) recognises this association, arguing that 'education and training are essential since these are important means by which workers... can upgrade their skills to match the demands of the changing global economy'.

Levels of formal education have been increasing steadily over the past two decades or so (Table 13). The proportion of people undertaking formal education has increased from 43.5% (1983) to 53.4% (1997), while the rate at which students remain to year 12 has also increased. In line with these changes, the proportion of people in the late 1990s with post-secondary education had increased to 14.3% (up from 7.6%), while the proportion of people with a minimum education fell.

Table 13: Human resource development in Australia: education levels.
Human resource development 1988 1998
Year 12 retention ratesA
Males
Females

53.9
61.8

65.9
77.7
Proportion of persons aged 15-69 years with a degree or higher 7.6 14.3
Proportion of persons aged 15-69 years who did not complete the highest level of secondary school 43.7 34.1B
Proportion of persons aged 15-24 years in education 43.5 54.1

APercentage of all students who stay at school until the end of year 12.
BData for 1998 are for 15-64 years and hence are not strictly comparable with 1998.

Source: ABS (2000b and various years).

Notwithstanding these trends, Australia ranks poorly internationally in relation to the most commonly used measure of human capital - that of education attainment. In a recent OECD study (CERI 1998; see Figure 19), Australia ranked 15th of 21 countries in terms of percentage of population completing at least upper secondary education.

Figure 19: Human capital in OECD countries, 1995.

 Human capital in OECD countries, 1995

Source: CERI (1998, p.17)

The 1996 SoE Report illustrated the variation in human capital across Australia's human settlements in 1991 using the ABS index of education and occupation. Similar data has been collated from the 1996 census. The 'index of education and occupation' reflects the education and occupational development of communities, providing a proxy measure for the development of human capital. The index illustrates the attained educational level or the extent to which further education was being undertaken at the time of the census. The occupation variables classify the workforce according to occupational status and the unemployed. An area with a high index number would have a high concentration of people with a higher degree or undergoing further education, and would have people employed in the higher skilled occupations rather than being labourers or unemployed (ABS 1998c).

Figures 20 and 21 show that there are marked spatial variations in this index, which is much higher in the big cities and other cities than in the rural and remote areas. And within the metropolitan cities the index is very much higher in the core and inner city zones than it is in the outer suburbs, showing a significant decline in its value with increasing distance from the inner city out to the fringe localities. Figure 20 is further confirmation of the role that cities are playing as engines of the new information-based economy (Brotchie et al. 1995). Figure 21 reflects yet another dimension of the transformation of Australia's cities that has begun to emerge over the past 10-15 years: a spatial turnaround which has seen the manufacturing industry and associated labour markets decentralise within cities, while information-based industries, their labour market and the associated housing markets of their employees have centralised (Gipps et al. 1997).

Figure 20: Variation in human capital across human settlements as measured by the SEIFA index of education and occupation, 1996.

 Variation in human capital across human settlements as measured by the SEIFA index of education and occupation, 1996

Source: ABS (1996c)

Figure 21: Variation in human capital across Australia's metropolitan areas as measured by the SEIFA index of education and occupation, 1996.

 Variation in human capital across Australia's metropolitan areas as measured by the SEIFA index of education and occupation, 1996

Source: ABS (1996c)