Potential savings for Newman Govt through cutting ineffective VET funding (e.g. for hairdressing)

In a recent conference paper published today by NCVER, Australia’s leading expert on vocational education and training (VET) Tom Karmel summarises recent research on the wage premium due to completing an apprenticeship or traineeship as follows (p. 11):

This research is important because it shows the apprenticeship and traineeship system is uneven in delivering skills of value. It raises questions about why public money is going to traineeships in some occupations. Among the apprenticeships, hairdressing emerges with a low premium and this raises issues about the efficacy of the apprenticeship model for this occupation.

The research shows that, while completing an apprenticeship in automotive trades can boost annual earnings by nearly $14,000, people who complete a hairdressing apprenticeship only earn a wage premium of around $600 per annum (compared with what the person would have earned in alternative employment). While this research is based on national data, I strongly suspect Queensland shows a similar pattern of wage premiums.

The low return to training in hairdressing suggests that too many people are being trained as hairdressers and the Government needs to review its level of public support for hairdressing training. Given the complexity of the training system, involving both apprenticeship/traineeship and formal study options, as well as TAFE and private providers, this is easier said than done. The Government ought to commission Skills Queensland to undertake a thorough review of public subsidies for different VET courses right away.

Tom Karmel’s paper is available here, though you will need to register with NCVER to download it:

VET research for industry

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