Australia's degree premium: 38% in 2024, down from 53% at the 2010 peak

Adelaide University researchers have measured the wage return to post-school education in Australia year by year rather than in aggregate, and found the hourly premium for a degree peaked at about 53% around 2010 before falling to 38% by 2024 ^[1][4][5]. That matters because the headline figure usually quoted for Australia, roughly 46%, is the 24-year average across the study window and sits eight percentage points above where the premium actually finished ^[3][7].

The study, published in International Review of Economics & Finance, used more than 250,000 observations of people aged 25 to 64 from the Household, Income and Labour Dynamics in Australia survey between 2001 and 2024 ^[1][2]. That is roughly 10,400 observations a year, enough to estimate an annual series rather than a period mean ^[6]. The design choice is the finding. Comparing only 2001 with 2024 shows relatively little net change in hourly premiums; the annual series shows a rise through the early 2000s followed by a prolonged decline ^[6]. Anyone who has been quoting stable endpoint comparisons has been describing a round trip as a flat line, and the 2024 hourly figure implies the 2001 starting point was in the same neighbourhood as today's ^[8].

The vocational picture is worse in relative terms. The VET hourly premium peaked at about 14% around 2010 and was 2% by 2024, a fall of 12 percentage points that erases roughly 86% of the advantage ^[4][5][2]. The degree premium's 15-point fall is a 28% relative decline ^[1]. In other words, a VET qualification's hourly wage advantage over Year 12 or below has all but disappeared, while a degree's has been trimmed ^[4][5].

The sharper signal is in hours. On weekly earnings, which combine wages and hours worked, the degree premium peaked at 71% around 2008 and fell to 40% by 2024, a 44% relative decline ^[7][3]. The VET weekly premium peaked at 32% in 2005 and reached 3% in 2024 ^[8][4]. At their respective peaks, the weekly premium ran 18 points above the hourly premium for graduates; by 2024 the gap was two points ^[5]. Lead researcher Dr Tinh Doan attributes that accelerated decline in weekly relative earnings to reduced work hours and underemployment ^[9]. Graduates used to earn more per hour and work more hours; the second advantage has largely gone ^[5][9].

Doan says the erosion coincides with rapid growth in post-school graduate numbers, structural shifts toward lower-productivity sectors, and skill mismatch, citing that about 30% of high-skilled workers are now in middle- or low-skilled roles ^[10]. On his account, returns reflect how qualifications are valued when the supply of skilled workers grows faster than the economy creates high-skilled jobs ^[11]. The data as described does not separate a devalued credential from a poor job match, and the hours channel points at demand for the work rather than the certificate itself ^[9][10].

The policy timing is awkward. The Australian Tertiary Education Commission, established in July 2025, supports a national target of 80% of the working-age population holding tertiary qualifications by 2050, 25 years out ^[12][9]. Doan warns that expanding participation without parallel growth in demand for high-skilled, non-routine work could push relative wages down further and raise graduate underemployment risk ^[13].

Watch for the follow-up work Doan says is needed on returns by field of study, occupation and cohort, including migrant versus local workers ^[14]. Until that lands, the aggregate premium tells students little about which course pays ^[15].