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					Appendix G. Transition from school to
work and further study1
G.1          Introduction
Successful transitions from school to work and further study depend upon three interacting
types of variables, or factors2.

First, they are a function of the social and economic context. This includes factors such as:

       the overall health of the economy and the labour market
       the distribution and nature of educational and employment opportunities
       the advantages or disadvantages conferred by the economic and cultural resources of young
       people‘s families.

Second, they are a function of the qualities of young people themselves. Among those that
matter for successful transitions are:

       young people‘s skills and level of educational achievement
       personal qualities such as resourcefulness and the ability to make plans and career decisions,
       and then to implement them.

Finally, they are a result of the nature and quality of the education and labour market institutions
that assist young people to make the transition. These include:

       the size and quality of pathways
       the closeness or otherwise of the links that exist between educational institutions and the
       labour market and further education
       the quality and appropriateness of teaching methods
       the availability of career information and guidance
       the match between curriculum content and the demands of employers and tertiary education
       institutions




1
 This chapter contains highlights from Sweet, R. (2010) Transition Outcomes: The Impact of Context and Institutions,
COAG Reform Council, http://www.coagrefromcouncil.gov.au/crc.
2
    Summaries of relevant evidence can be found in OECD (2000), Penman (2004), Raffe (2008) and Sweet (2009a).


National Agreement for Skills and Workforce Development: Performance report for 2009                              103
      the existence of a rational youth and training wage structure that allows young people with
      relatively little experience to obtain entry-level jobs and be provided with training by
      employers
      effective co-operation between key players such as governments, educational institutions,
      employers and trade unions
      the existence of tight safety nets to quickly provide help to those who flounder the most in
      the transition.

Here, those factors that can be shown to have a positive relationship to the outcomes of the
transition are referred to as predictors.

How do we know if the transition has been successful? Young people generally want to finish
high school, get a further education and training qualification, gain useful labour market skills,
settle quickly into work once they have left education, and avoid prolonged periods of
unemployment or inactivity. Governments‘ policy objectives are closely aligned to those of
young people themselves: they also span skills, qualifications and the labour market. And so
there can be no single measure of the success of the transition if the several objectives of both
young people and governments are to be captured.

Another reason for adopting multiple measures of the success of the transition is that young
people may succeed on one dimension—skills, qualifications or jobs—but not another. For
example they may do well at school, get into the post-school course that they want, but then find
that it doesn‘t match their expectations and drop out. Or they may get a qualification but find it
hard to get the job that they want because of limited opportunities in their local labour market.
Here, those factors that show the success or otherwise of the transition are referred to as
transition outcomes.

Not all transition predictors or transition outcomes are able to be readily measured or easily
expressed in simple statistical terms. Where they can be, they are referred to here as indicators.
Some of the predictors that the research literature shows to be consistently related to transition
outcomes—such as socio-economic status, young people‘s educational achievement and the
overall health of the labour market and the economy—are relatively easy to measure and
express as indicators. Others, such as personal confidence and decision making skills, are less
easy to measure. Some of the more important measures of the success of the transition are also
relatively easy to measure and express as indicators. Examples include educational attainment,
employment and unemployment.

However the quality and nature of the education and labour market institutions that mediate and
influence the transition are far harder to measure and express as indicators than are transition
predictors and transition outcomes. For example, we do not have useful national indicators of
co-operation between schools and employers, the quality of qualification pathways, the extent of
curriculum choice, the existence of safety nets for early leavers, or the availability of career
information and guidance. Yet in recent years these are the types of factors that have been a
major focus of government policy and program interventions to improve transition outcomes.

Given the current state of the art, the impact upon transition outcomes of the quality and nature
of State and Territory institutional arrangements in the education system and the labour market


104                         National Agreement for Skills and Workforce Development: Performance report for 2009
can at best be understood indirectly. The approach adopted in this chapter is to try to gauge their
impact, relative to the impact of contextual factors, by looking at the relationship between some
key transition predictors on the one hand, and some key transition outcomes on the other.


G.2       Can States and Territories influence transition outcomes?
Geographical location (remoteness, degree of urbanisation and the like) has commonly been
used as an independent predictor in both Australian and international research on school-to-
work transitions: however State or Territory has been used quite rarely as an independent
predictor. States and Territories share something in common with geographical regions, in that
both can vary in their social and economic circumstances and their labour market structures.
However unlike geographical regions such as Local Government Areas, States and Territories
can differ in their governance and regulatory arrangements for education and the labour market,
and hence can differ in the institutional arrangements that help to shape transition outcomes.

State and Territory policies help to shape the level of young people‘s achievement in basic
literacy and numeracy. They have an impact upon the distribution of educational and
community services between different geographical regions. They determine the range and
character of curriculum choices available to young people in the post compulsory years, the
requirements for obtaining senior school certificates, and the size and character of education and
training pathways. They largely determine the size and character (in terms of factors such as the
age composition and grade or Year composition) of the schools and vocational education
providers that offer post-compulsory programmes. They shape the typical relationship between
age and school Year within a State or Territory, and hence the average ages at which young
people leave school, enter the labour market, or make the transition to further education and
training. They provide many of the services available to support those young people who are
most disadvantaged in the transition. All of these factors are known to have an impact upon
transition outcomes. And steps that State and Territory governments take to attract or encourage
particular industries (for example sport and entertainment, financial services, automotive
manufacturing) can alter the pattern of demand for skills and qualifications.

It seems reasonable, then, to expect that State and Territory policies and institutional
arrangements might have an impact upon transition outcomes, over and above the varying
economic and social contexts of the States and Territories. The analytical framework adopted
for the chapter suggests that the gap, if any, between predictors and outcomes might be taken as
an indication of the extent to which State and Territory institutional factors influence transition
outcomes, over and above the impact of contextual factors. Such a framework can set the stage
for the identification of the policy interventions that enable a state or territory to achieve
transition outcomes for its young people beyond those that might be expected on the basis of its
transition predictors.




National Agreement for Skills and Workforce Development: Performance report for 2009           105
Figure G.1           A framework for understanding transitions


                INPUTS                 +              INSTITUTIONS                =              OUTCOMES




     For example:                                For example:                             For example:
      GSP per capita                              Pathways                                 Qualifications
      Labour market                               Teaching quality                         Jobs
     conditions                                   Career guidance                          Skills
      Educational                                 Relative wages
     achievement                                  Safety nets
      Family resources                            Curriculum quality




G.3          Transition predictor indicators
Using the above framework, eight transition predictor indicators have been constructed for each
State and Territory3. They are:

       Socio-economic status (SES): The decile corresponding to the median of the distribution of
       scores on the ABS SEIFA Index of Relative Socio-economic Advantage and Disadvantage
       (IRSAD), 2006. Scores that are above 5.0 indicate that a relatively high proportion of the
       population lives in high socio-economic status areas. Scores that are below 5.0 indicate that
       a relatively high proportion of the population lives in low socio-economic status areas4.
       State or Territory wealth (GSP): Gross State Product per person at current prices,
       2008-09. High values represent relative advantage. High values represent relative
       advantage5.
       Geo-location: An index of the weighted proportions of the population living in major cities,
       inner regional, outer regional, remote and very remote areas, 2009. The index would have a
       value of 5.0 if all of the population lived in major cities and 1.0 if all of the population lived
       in very remote areas6.




3
    Additional details of how indicators were constructed can be found in Sweet (2010).
4
 Source: ABS Census of Population and Housing: Socio-Economic Indexes for Areas (SEIFA), Australia - Data only,
2006. The ABS recommends the use of IRSAD when, as here, the concern is to examine both advantage and
disadvantage rather than only disadvantage.
5
    Source: ABS Australian National Accounts: State Accounts, 2008-09.
6
    Source: ABS Regional Population Growth, Australia, 2008-09.


106                               National Agreement for Skills and Workforce Development: Performance report for 2009
       Indigenous population: Indigenous full-time equivalent students as a proportion of all Year
       7 to 12 full-time equivalent students, 2009. High values represent relative disadvantage7.
       Employment: The monthly average of the percentage of the population aged 15 to 64 that is
       employed, 2009. High scores represent relative advantage8.
       Unemployment: The average monthly unemployment rate among persons aged 15 to 64,
       2009. High scores represent relative disadvantage9.
       Skill structure: An index of the weighted percentage, averaged over four quarters, of
       employed persons in each ANZSIC industry Division with tertiary-level post-school
       qualifications, intermediate-level post-school qualifications and no post-school
       qualifications, summed over all ANZSIC industry Divisions, 2009. The indicator expresses
       the relative demand for skills and post-school qualifications within States‘ and Territories‘
       employment structures. It would have a maximum value of 100 if all workers in all industry
       Divisions had tertiary qualifications and zero if all workers in all industry Divisions had no
       post-school qualifications10.
       Achievement: The average of NAPLAN (National Assessment Program – Literacy and
       Numeracy) Year 9 reading and numeracy scores, 2009. High values represent relative
       advantage11.

Table G.1 shows each State and Territory‘s values for each indicator.




7
    Source: ABS National Schools Statistics Collection.
8
    Source: ABS Labour Force, Australia, Detailed - Electronic Delivery.
9
    Source: ABS Labour Force, Australia, Detailed - Electronic Delivery.
10
     Sources: ABS Labour Force, Australia, Detailed, Quarterly and ABS Education and Work, Australia May 2009.
11
  Source: ACARA (2010) National Assessment Program Literacy and Numeracy: Achievement in Reading, Writing,
Language Conventions and Numeracy


National Agreement for Skills and Workforce Development: Performance report for 2009                             107
                                                        1
Table G.1           Transition predictor values

                        NSW           Vic        Qld         WA          SA          Tas        ACT          NT        Aust

 SES                      5.7         5.4         5.1         5.8        3.8         2.8         8.2         5.3         5.0

 GSP                 $57 138     $54 361     $56 075     $77 108    $48 999     $46 326     $74 658     $77 444     $57 903

 Geo-location             4.7         4.7         4.4         4.5        4.5         3.6         5.0         2.3         4.5

 Indigenous               3.6         0.9         5.7         5.6        3.0         6.0         1.6        37.6         3.9
 population2

 Employment              70.2        71.5       73.7         74.7       71.8        69.8        78.3        75.6        72.0

 Unemployment2            6.2         5.7         5.5         5.0        5.7         5.1         3.3         3.9         5.7

 Skill structure         48.3        47.9       47.0         47.2       47.9        47.4        55.2        49.5        47.9

 Achievement            591.0      592.4       575.0        578.1      577.3       575.3       599.7       533.0      584.8
Notes:
1.    The construction of the indicators, including units of measurement, is described in the text.
2.    High scores represent relative disadvantage.


The eight transition predictors were selected to reflect what are known to be major influences
upon school-to-work transition outcomes, as well as to reflect the approach to performance
assessment that has been adopted by the COAG Reform Council and the framework of
contextual factors adopted in previous council reports12.

      The importance of overall economic and labour market conditions in influencing transition
      outcomes can be shown using both comparative data—comparing countries that vary in
      GDP per capita, in employment rates and in unemployment rates—and Australian time
      series data.
      - The OECD (2000) shows that a healthy economy and a well-functioning labour market
        are among the key factors that produce successful national transition outcomes. The
        importance of overall labour market conditions has been confirmed in more recent
        OECD work for its Jobs for Youth project (Quintini and Martin, 2006; Scarpetta et al.,
        2010). Analysis of Australian time series data shows that a high proportion of the
        variation over time in some key transition outcomes can be explained by overall labour
        market conditions. Between 1978 and 2009, 91 per cent of the variation in 15-19 year-
        olds‘ unemployment rate could be explained by variation in the overall unemployment




12
  Of the contextual factors used in previous COAG Reform Council reports, language background other than English
has not been used here. This is because there is limited evidence that it is consistently associated with either advantage
or disadvantage in the transition. Its effects can be contradictory, both between outcomes for different language groups,
between outcomes for different sectors of education, and between education and labour market outcomes.


108                             National Agreement for Skills and Workforce Development: Performance report for 2009
         rate; and between 1986 and 2009 42 per cent of the variation in the number of 20-24
         year olds not in education who were in full-time employment could be explained by the
         overall level of employment13.
     Both socio-economic status and young people‘s educational achievement have been shown
     to be powerful predictors of a range of educational and labour market transition outcomes in
     longitudinal studies that track young people for a number of years after they leave school.
     This is the case both in Australia and in other countries (Schnabel et al 2002; Penman 2004;
     OECD 2010).
     Studies that gather data from individual students and then track their educational and labour
     market progress show that Indigenous status is strongly related to transition outcomes, with
     young Indigenous people on average faring worse on most indicators than non-Indigenous
     young people (Penman 2004; Long and North 2009). While the impact of this upon
     indicators of overall State and Territory performance might be minimal where the
     proportion of Indigenous students is low, it is likely to be important where the proportion is
     high.
     Geo-location has been included as a contextual factor in previous COAG Reform Council
     reports. Australian research (Penman 2004) shows it to have a relatively weak impact on
     overall transition outcomes, some of which do not persist over time. However when
     measured at the State and Territory level rather than the individual level it is likely to be
     more important as a predictor for those States and Territories where the proportion living in
     remote areas is high.
     Employment structure has also been included as a contextual factor in previous COAG
     Reform Council reports. However a simple description of the distribution of employment by
     ANZSIC industry Division does not by itself produce an indicator that has a clear
     conceptual relationship to transition outcomes. For this reason an indicator has been
     constructed using employment structure data to express the relative State and Territory
     demand for skills and post-school qualifications, which can be shown to have an impact
     upon transition outcomes (Gangl 2001).


G.4        Transition outcome indicators
In addition to indicators of factors that are known to have an influence on the success or
otherwise of the transition, the analytical framework that has been adopted requires a set of
indicators that reflect, whether from the perspective of young people or from governments‘
perspective, the outcomes of the transition. And, as indicated in Section 9.1, this requires
several indicators to be adopted to reflect different types of outcomes. Seven transition outcome




13
    Sources: ABS Labour Force, Australia, Detailed - Electronic Delivery. Time series data for the estimated impact of
overall labour market conditions upon employment outcomes for 20-24 year-olds not in education is not as extensive as
it is for the estimation of their impact upon teenage unemployment.


National Agreement for Skills and Workforce Development: Performance report for 2009                             109
indicators have been constructed for each State and Territory. They illustrate transition
outcomes that span educational attainment, skills, educational participation, employment, the
extent to which young people are at risk in the transition, and the duration of the transition.
They are:

       Educational participation: The percentage of 15 to 19 year-olds participating in education,
       2008. High values represent better performance14.
       Low qualifications: The percentage of persons aged 20 to 24 who have not completed Year
       12 (or equivalent) or attained at Certificate II level or above, May 2009. Low values
       represent better performance15.
       Tertiary qualifications: Persons aged 25 to 34 with tertiary qualifications (those at the
       International Standard Classification of Education, or ISCED, levels 5 and 6), May 2009.
       High values represent better performance16.
       Literacy skills: The percentage of 20 to 24 year-olds falling below level 3 on the Adult
       Literacy and Life Skills document literacy scale, 2006. Low values represent better
       performance17.
       Employment: The monthly average of the percentage of 20 to 24 year-olds not in full-time
       education who are employed, 2009. High values represent better performance18.
       Unemployment and inactivity: The monthly average of the percentage of 15 to 19 year-
       olds not in full-time education who are unemployed or not in the labour force, 2009. Low
       values represent better performance19.




14
  Source: DEEWR special tabulation based upon: (i) ABS National School Statistics Collection- full-time plus part-time
students; (ii) NCVER special tabulation - excluding school students and those studying for non-AQF qualifications; (ii)
Data provided by DEEWR Higher Education Group; (iv) ABS Population by Age and Sex, Australian States and
Territories. Tertiary education data for 2009 was not available at the time of publication and as a result the indicator
could only be constructed for 2008
15
  Source: ABS Education and Work Australia. At its April 2009 meeting COAG agreed to adopt Certificate III as the
equivalent of Year 12 completion from 2020, although retaining Certificate II in the interim. The National Agreement on
Skills and Workforce Development specifies Certificate III as the minimum measure of attainment of a depth and
breadth of skills required for a 21st century labour market. In reporting to international agencies such as the OECD
Australia follows the agreed international standard and treats Certificate II as lower secondary qualifications. In practice
the adoption of one or the other as the equivalent of Year 12 makes minimal difference to the picture of relative State
and Territory performance. The two indicators vary in most cases by no more one percentage point or less, and by only
around two percentage points in Tasmania and the Northern Territory. As the difference is small, the AQF level that
COAG has agreed to adopt until 2020 as the equivalent of Year 12 attainment (Certificate II) has been used here to
compare State and Territory performance.
16
     Source: ABS Education and Work Australia, special tabulation.
17
     Source: ABS Adult Literacy and Life Skills Survey, Summary Results Australia, special tabulation.
18
     Source: ABS Labour Force, Australia, Detailed - Electronic Delivery.
19
     Source: ABS Labour Force, Australia, Detailed - Electronic Delivery.


110                               National Agreement for Skills and Workforce Development: Performance report for 2009
     Transition duration: The time that it takes young people to settle into work after leaving
     education, here defined as the number of years between the first age at which 50 per cent of
     the cohort are not in education and the first age at which 50 per cent of the cohort are in full-
     time employment, 2008. Low values represent better performance20.

Table G.2 shows each State and Territory‘s values for each indicator.

                                                        1
Table G.2             Transition outcome values

                                      NSW        Vic        Qld     WA        SA       Tas       ACT      NT        Aust

Educational participation             76.7       86.4       71.4    75.8      78.6     85.4      90.9     59.2      78.5
                        2
Low qualifications                    13.8       13.2       14.4    22.7      20.6     29.3      4.9      31.0      15.5

Tertiary qualifications               47.1       52.5       35.2    41.0      38.1     33.6      63.9     36.7      44.8
                  2
Literacy skills                       34.8       40.7       35.3    35.9      36.9     52.4      26.8     43.5      36.9

Employment                            80.4       81.1       81.0    76.7      78.2     78.7      82.6     83.6      80.2

Unemployment and
          2
inactivity                            34.0       36.8       28.7    25.5      29.2     32.2      21.2     35.1      31.6
                            2
Transition duration                   2.6        1.0        2.9     1.4       4.3      1.8       0.7      1.2       2.5
Notes:
1.   The construction of the indicators, including units of measurement, is described in the text.
2.   Low values indicate better performance.




G.5        Comparing indicators
For purposes of the analysis, a simple way needed to be found to compare indicators that are
expressed in different units: for example $‘000 in the case of GSP, but number of years in the
case of transition duration, and percentages in the case of many other indicators. Second, the
analysis required a simple way to compare on the one hand indicators for which a high value
indicates a favourable predictor or a good outcome (for example SES or tertiary qualifications),
and on the other hand indicators for which low values indicate a favourable predictor or a good
outcome (for example unemployment or low qualifications). And third, to avoid making




20
  Source: ABS Education and Work Australia, special tabulation. 2008 was used rather than 2009 as the equivalent
data for 2009 contained a large number of cells with very high relative standard errors (RSEs), as a result of which a
valid indicator could not be calculated. For 2008 the calculations for Tasmania, the Northern Territory and the Australian
Capital Territory required the use of some cells with RSEs of 25 per cent to 50 per cent and thus should be interpreted
with caution. For Australia the value of the indicator increased by 12 months between 2008 and 2009. For the six
States and Territories for which the indicator could be calculated, the rank order was much the same in 2008 and 2009
except for Victoria where the indicator increased substantially and Queensland where it fell appreciably.


National Agreement for Skills and Workforce Development: Performance report for 2009                                 111
multiple and potentially confusing individual comparisons between eight predictors and seven
outcomes, a simple way of combining indicators was required.

To address these issues, all predictors and outcomes have been converted to standard scores
with a mean of zero: a score greater than zero indicates a favourable predictor or a desirable
outcome; and a score that is less than zero indicates an unfavourable predictor or an undesirable
outcome21. Where a low score on an indicator points to good policy performance, or policy
virtue (for example low unemployment, few young people with low qualifications), the
direction of the standard score‘s sign is reversed so that high values are shown as being
negative, or below the Australian average. With all indicators expressed in a common way it
becomes possible to add them and to calculate average predictor scores and average outcome
scores in a way that makes policy sense22 23. The method adopted means that for any one
predictor or outcome, data must be available for all States and Territories if an indicator is to be
calculated.


G.6        Comparing predictors and outcomes: State and Territory
           performance

G.6.1      Comparing predictors to overall outcomes

Indicators have been constructed for eight factors that predict transition outcomes. These span
socio-economic status, State and Territory economic and labour market conditions, geo-
location, Indigenous population shares, skill demand, and student achievement. Seven indicators
of transition outcomes have been constructed spanning educational participation and attainment,
literacy skills, employment, unemployment and inactivity, and the duration of the transition.




21
  Referred to as z scores, these standard scores all have a common mean of zero and standard deviation (a measure
of the degree of variation) of 1.0. For all indicators the total score for Australia has been used to represent the mean,
rather than the mean of the eight State and Territory values, as this would give undue weight to States and Territories
with smaller populations.
22
  The validity of adding and averaging indicators depends upon the extent to which they are correlated. If they were
perfectly correlated there would be no need for multiple indicators. If they were not correlated at all, they would appear
to be too dissimilar to add and to average. A statistical test of the relationship between the eight predictors shows that
there is reasonably strong but not perfect relationship between them. The same is true of the statistical relationship
between outcomes.
23
  A simple addition of standard scores for predictors and outcomes assumes that they should have equal weights. Ryan
(2010) demonstrates that whilst weighting will make some difference to absolute values, it has minimal impact upon the
relative rank ordering of the States and Territories. A more detailed analysis of the impact of excluding geo-location and
Indigenous students upon apparent relative State and Territory performance is provided in Section 4.2 of Sweet (2010).


112                              National Agreement for Skills and Workforce Development: Performance report for 2009
Figure G.2 compares the average standard scores for the eight transitions predictor indicators
and for the seven transition outcome indicators for each State and Territory24. It shows that:

     NSW’s transition outcomes and transition predictors are both almost exactly at the national
     average.
     Victoria’s transition predictors are very close to the national average but its transition
     outcomes are somewhat higher. It is the only State or Territory for which outcomes are more
     than marginally above predictors.
     Queensland’s transition predictors and transition outcomes are quite close together, and
     both are a little lower than the national average.
     Western Australia’s transition predictors are somewhat above the national average, its
     transition outcomes are a little higher than the national average, and its outcomes are a little
     lower than its predictors.
     South Australia’s transition outcomes are lower than those of any State and Territory
     except Tasmania and the Northern Territory. The level of its transition predictors is also
     below the national average, although a little above the level of its outcomes.
     Tasmania’s transition predictors and transition outcomes are both well below the national
     average, and are very close to one another. Its predictors are the lowest of all States‘ and
     Territories‘ and its outcomes are the second lowest.
     The ACT’s transition predictors are by far the highest of all States and Territories, as are its
     transition outcomes. Both are well above the national average, and outcome levels are
     essentially the same as the level of predictors.
     The Northern Territory’s transition predictors are lower than all States‘ and Territories‘
     except Tasmania‘s. Its transition outcomes are well below the national average, the lowest
     of any State and Territory, and lower than its predictors by a substantial margin.

In summary, with the exception of the Northern Territory—where transition outcomes appear to
be appreciably lower than might be expected on the basis of transition predictors—States‘ and
Territories‘ overall transition outcomes are relatively close to the level of their predictors. In
Victoria outcomes are higher than predictors: in all other States and Territories where there
appears to be some difference, the difference is in the other direction, with outcomes lower than
predictors.




24
  Wherever possible 2009 has been used as the reference year for both predictor indicators and outcome indicators.
However in some cases of necessity 2008 has been used as the reference year, and 2006 in the case of indicators that
use census data. Furthermore in 2009 the impact of the global financial crisis can be demonstrated upon a number of
economic and labour market indicators. The impact of using 2008 rather than 2009 as the reference year has been
explored in detail: this analysis can be found in Sections 4.1 and 4.6 of Sweet (2010). The analysis shows that whilst
some absolute values change somewhat between 2008 and 2009, the overall ranking of State and Territory
performance remains much the same, with only minor changes in the overall ranking.


National Agreement for Skills and Workforce Development: Performance report for 2009                              113
G.6.2         Comparing predictors separately to labour market outcomes and to
              education outcomes

The pattern of relative State and Territory performance is somewhat more diverse when labour
market outcomes are separated from educational outcomes and when both are separately
compared to the average of all predictors. Figure G.3 shows the relationship between average
labour market outcomes25 and average predictors; Figure G.4 shows the relationship between
average education outcomes26 and average predictors. The following conclusions can be drawn:

       Labour market outcomes are generally closer to what might be expected on the basis of
       transition predictors than are education outcomes.
       Across all States and Territories labour market outcomes on balance are above the average
       levels of transition predictors, but education outcomes on balance are below them.
       South Australia‘s labour market outcomes are appreciably lower than its predictors. In
       Western Australia and Tasmania labour market outcomes are appreciably higher than might
       be expected on the basis of transition predictors.
       Education outcomes are somewhat below the national average in Queensland and South
       Australia, and appreciably below the national average in Western Australia, Tasmania and
       the Northern Territory.
       Victoria and NSW are the only States and Territories in which education outcomes exceed
       average predictor levels, although not by a great deal.
       Education outcomes are substantially lower than transition predictor levels in Western
       Australia, Tasmania and the Northern Territory and are somewhat lower in Queensland.




25
     The average of Employment, Unemployment and inactivity, and Transition duration.
26
     The average of Educational participation, Low qualifications, Tertiary qualifications, and Literacy skills


114                                 National Agreement for Skills and Workforce Development: Performance report for 2009
Figure G.2        Average standard scores for transition predictor indicators and transition
                  outcome indicators, 2009

  Standard score
  2.00
                                                Outcomes                Predictors
  1.50

  1.00

  0.50

  0.00

 -0.50

 -1.00

 -1.50

 -2.00
             NSW            Vic         Qld          WA            SA          Tas     ACT   NT




Figure G.3        Average standard scores for labour market outcome indicators and
                  transition predictor indicators, 2009

 Standard score                      Predictors               Labour market outcomes
  2.00

  1.50

  1.00

  0.50

  0.00

 -0.50

 -1.00

 -1.50

 -2.00
             NSW            Vic         Qld          WA            SA          Tas     ACT   NT




National Agreement for Skills and Workforce Development: Performance report for 2009              115
Figure G.4     Average standard scores for education outcome indicators and transition
               predictor indicators, 2009


 Standard score
                                      Predictors                Education outcomes
   2.00

   1.50

   1.00

   0.50

   0.00

   -0.50

   -1.00

   -1.50

   -2.00
             NSW        Vic         Qld         WA           SA          Tas         ACT           NT



That labour market outcomes are both higher than education outcomes, closer to and more often
above the level that might be expected from the level of transition predictors than are education
outcomes is in some ways understandable. Compared to many other OECD countries Australia
has a very ―youth friendly‖ labour market (OECD, 2009), with youth wages, training wages,
low levels of employment protection legislation, and many opportunities for young people to
combine work and study. For many decades national labour market institutions have existed in
areas such as wage fixation and dispute resolution that help to reduce diversity among the States
and Territories. In addition, the operation of national private and public enterprises across State
and Territory borders helps to reduce differences in employment conditions.

On the other hand national institutional arrangements in schooling and in vocational training
have been much slower to emerge, and remain relatively under-developed. This does not,
however, offer a complete explanation for why, on balance, education outcomes are, in a
relative sense, low, and why they are particularly lower than might be expected in some States
and Territories.


G.7        A comparative perspective on Australia‘s transition outcomes
So far the analysis has compared State and Territory transition predictors and transition
outcomes to Australian averages. Using a relatively small number of indicators, this section
comments on how Australia and the States and Territories compare to average OECD
performance. 2007 (or the closest year) is used as the reference year, as this is the most recent
year for which the OECD has published education indicators in its annual publication Education
at a Glance. The indicators have been developed using publicly available sources, rather than
special tabulations as was the case for some indicators in the previous analysis of State and
Territory performance. This means that the number is more limited and some are not completely
comparable to those used in the earlier analysis.



116                       National Agreement for Skills and Workforce Development: Performance report for 2009
G.7.1         Comparative national performance

Table G.3 compares Australia to the OECD average (using standard scores based upon the
OECD mean and standard deviation) on five transition predictors. They are:

       GDP: GDP per capita in $US at purchasing power parity, 200727;
       Employment: The employment to population ratio, persons aged 15-64, monthly average,
       200728;
       Unemployment: Unemployment rate, persons aged 15 to 64, monthly average, 200729;
       Socio-economic status (SES): Score on the PISA 2006 index of economic, cultural and
       social status30;
       Achievement: Score on the PISA 2006 science scale31;

Table G.3             Selected transition predictors: Australia compared to the OECD average,
                      2007

                                                         Australia                     OECD average

                                                 Value           Standard                 Value
                                                                  Score

 GDP                                            $36,100              0.22                $33,237

 Employment                                       72.8               0.59                  68.0
                                                                         1
 Unemployment                                      4.4               0.60                   5.9

 SES                                              0.21               0.52                  0.00

 Achievement                                      527                0.87                  500
Notes:
1.      Direction reversed to reflect policy virtue.


Table G.4 compares Australia to the OECD average on four transition outcomes. They are:

       Unemployed or inactive, 15-19: The percentage of 15 to 19 year-olds not in education who
       are unemployed or not in the labour force, 200732;




27
     Source: OECD (2008) OECD in Figures, 2008, Paris. http://stats.oecd.org/.
28
     Source: http://stats.oecd.org/.
29
     Source: http://stats.oecd.org/.
30
     Source: OECD (2007) PISA 2006. Volume 2: Data, Paris.
31
  Source: OECD (2007) PISA 2006. Volume 2: Data, Paris. The science scale was selected as it was the major
domain sampled in PISA 2006.


National Agreement for Skills and Workforce Development: Performance report for 2009                         117
       Employment 20-24: The percentage of 20 to 24 year-olds not in education who are
       employed, 200733;
       Educational participation 15-19: The percentage of 15 to 19 year-olds participating in
       education, 200734.
       Tertiary qualifications 25-34: The percentage of persons aged 25 to 34 with tertiary
       qualifications (ISCED 5/6), 200735.

Table G.4            Selected transition outcomes: Australia compared to the OECD average,
                     2007
                                                            Australia                    OECD average

                                               Value (%)          Standard                  Value (%)
                                                                   Score
                                                                           1
 Unemployed or inactive 15-19                        18.4           0.81                        25.7

 Employment 20-24                                    87.2               0.92                    80.4

 Education participation, 15-19                      79.6           -0.33                       84.3
 Tertiary qualifications 25-34                       40.7               0.57                    34.2
                                                                           1
 Unemployed or inactive 15-19                        18.4           0.81                        25.7
Notes:
1.     Direction reversed to reflect policy virtue


Australia is above the OECD average on all of the transition predictors shown in Table G.3, and
by quite a bit more on all except GDP per capita. Australia is well above the OECD average on
three of the four outcome indicators shown in Table G.4. It is particularly high compared to the
OECD average on the two indicators of labour market outcomes for youth. This pattern of
labour market performance exceeding education outcomes is consistent with the pattern
revealed in the previous analysis of State and Territory performance. Like that pattern, it is
consistent with Australia‘s strong recent economic and labour market performance relative to
the rest of the OECD, and to the ‗youth friendly‘ nature of its labour market. The striking
anomaly in Table G.4 is the indicator of educational participation among 15 to 19 year-olds,
which is quite a bit below the OECD average.

The most recent (2009) edition of the OECD‘s annual Education at a Glance publication
contains time series data for two of the key indicators shown in Table G.4. Figure G.5 shows,




32
     Source: OECD (2009) Education at a Glance: OECD Indicators, Paris, Table C3.2a.
33
     Source: OECD (2009) Education at a Glance: OECD Indicators, Paris, Table C3.2a.
34
     Source: OECD (2009) Education at a Glance: OECD Indicators, Paris, Table C3.2a.
35
     Source: OECD (2009) Education at a Glance: OECD Indicators, Paris, Table A1.3a.


118                               National Agreement for Skills and Workforce Development: Performance report for 2009
for educational participation among 15 to 19 year-olds and employment among 20 to 24 year-
olds who are not in education, trends between 1995 and 2007 in Australia‘s performance
relative to the OECD average (using the same type of standard scores as used in Tables G.3 and
G.4). For the entire period the employment rate among 20 to 24 year-olds who have left
education has been above the OECD average, and the extent to which this indicator exceeds the
OECD average has been rising steadily since the late 1990s.

Between the mid 1990s and 2000 Australia‘s education participation rate among 15 to 19 year-
olds was below the OECD average, but not by a great deal. However since 2000 it has
deteriorated steadily relative to the rest of the OECD, and the most recent data (for 2007) shows
Australia to be well below the OECD average. When trend lines are fitted to actual participation
rates (Figure G.6) it is clear that Australia‘s deteriorating performance relative to the OECD is
largely due to a rate of growth in educational participation among 15 to19 year-olds that has
lagged substantially below rates of growth recorded elsewhere in the OECD.

Figure G.5        Trends in Australia’s performance relative to the OECD average on two
                  transition outcomes, 1995 to 2007

  Standard Score               15-19 in education                20-24 not in education and employed
  1.00
  0.80
  0.60
  0.40
  0.20
  0.00
 -0.20
 -0.40
 -0.60
 -0.80
 -1.00
           1995     1997    1998     1999    2000     2001    2002     2003    2004    2005   2006   2007


Source: OECD Education at a Glance 2009, Table C3.4a.




National Agreement for Skills and Workforce Development: Performance report for 2009                    119
Figure G.6         15 to 19 year old educational participation in Australia relative to the OECD
                   average, 1995 to 2007


      Per cent              OECD average                           Australia
                            Linear (OECD average)                  Linear (Australia)
     84.0

     82.0

     80.0

     78.0

     76.0

     74.0

     72.0
            1995   1997     1998     1999     2000     2001     2002     2003    2004     2005     2006     2007


Source: OECD Education at a Glance 2009, Table C3.4a.


G.7.2       Comparative State and Territory performance

As previously indicated, there is little tradition of using regional administrative jurisdictions
such as State and Territory as independent variables in research on school-to-work transition,
and of investigating the impact of the different regional governance and regulatory
arrangements over and above the impact of regional differences in social and economic
circumstances. For example, of the 55 research reports produced by the Australian Council for
Educational Research using data from the Longitudinal Surveys of Australian Youth between
1996 and January 2009, 43 used geographical location (for example metropolitan-regional-rural
differences) as an independent variable in the analysis, but only seven treated State or Territory
as an independent variable. The situation in other countries with federal systems of government
appears similar. Although a recent report using the Canadian longitudinal Youth in Transition
database (OECD, 2010) did show differences in transition outcomes between the Canadian
Provinces, the study did not take into account differences between the Provinces in factors such
as economic circumstances and labour market demand.

An analysis of State and Territory transition performance relative to the OECD average for 2006
(Sweet, 2009b)36 shows wide variation in transition predictors and outcomes relative to the
OECD average. Although individual outcome indicators were shown to range from one extreme




36
  Using a somewhat different, and larger, set of predictor and outcome indicators than have been used here to compare
State and Territory performance.


120                            National Agreement for Skills and Workforce Development: Performance report for 2009
to another of the OECD range, the overall pattern of performance for the individual States and
Territories was broadly similar to the pattern revealed here. In other words labour market
outcomes were on balance better than education outcomes, the rank ordering of the States and
Territories in terms of overall outcomes was quite similar, as was the relationship between
predictors and outcomes for individual States and Territories.

Figure G.7 provides a suggestion that the differences in transition outcomes between the
Australian States and Territories that have been observed in the present study might be
somewhat larger than observed in other OECD countries with federal systems of government.
For five countries (Australia, Canada, Germany, Spain and Switzerland) it shows the range of
PISA 2006 science scores for each country‘s principal administrative jurisdictions (respectively:
eight States and Territories; 11 Provinces; 16 Länder, ten Autonomous Communities; and 17
Cantons).

Figure G.7        PISA science achievement scores, principal administrative jurisdictions in
                  five federated countries, 2006

 Mean science
     score
 560

 540

 520

 500

 480
                                                            OECD average
 460

 440
               Australia            Canada             Germany              Spain           Switzerland



Source: Australia http://www.acer.edu.au/ozpisa/; Canada http://www.pisa.gc.ca/; Germany http://pisa.ipn.uni-
kiel.de/pisa2006/index.html; Spain http://www.institutodeevaluacion.mec.es/publicaciones/; Switzerland
http://www.pisa.admin.ch/.


Although in each country there is a wide spread of performance between jurisdictions, the
variation between jurisdictions is substantially larger in Australia, the gap between the best and
worst jurisdictions is greater, and the slope of the gradient between best and worst performance




National Agreement for Skills and Workforce Development: Performance report for 2009                        121
is much steeper37. Given that educational achievement has consistently been shown in the
research literature to be, alongside socio-economic status, one of the strongest predictors of
transition outcomes (see, for example Penman 2004), this suggests that differences in outcome
measures in Australia might also be similarly larger than in other federal countries.


G.8        Conclusion
At the State and Territory level, institutional arrangements within education, and institutional
arrangements that help to connect education to the labour market, have been the focus both of a
great deal of recent policy attention and of many program initiatives designed to improve young
people‘s transition outcomes. Yet we have few useful measures of how effective these
institutional arrangements are. One way of trying to assess the extent to which they add to or
subtract from States‘ and Territories‘ transition outcomes, over and above the impact of the
social and economic context, is to look at how closely the level of a number of factors known to
predict transition outcomes matches the level of transition outcomes, and to draw inferences
about institutional performance from any gaps. A similar method can be used to assess
Australia‘s transition outcomes relative to those of other OECD countries.

When used to look at State and Territory performance, this method shows that, with the
exception of the Northern Territory, where transition outcomes appear to be appreciably lower
than might be expected on the basis of transition predictors, States‘ and Territories‘ overall
transition outcomes are relatively close to the level of their predictors. In Victoria, outcomes are
higher than predictors: in all other States and Territories where there appears to be some
difference, the difference is in the other direction, with outcomes lower than predictors.

The pattern of relative State and Territory performance is somewhat more diverse when labour
market outcomes are separated from educational outcomes and when both are separately
compared to predictors. Labour market outcomes are both higher than education outcomes, and
closer to and more often above the level that might be expected from the level of transition
predictors than are education outcomes. Victoria and NSW are the only States and Territories in
which education outcomes exceed average predictor levels, although not by a great deal.
Education outcomes are substantially lower than transition predictor levels in Western Australia,
Tasmania and the Northern Territory and are somewhat lower in Queensland.

This pattern of labour market outcomes exceeding education outcomes can also be observed
when Australia‘s transition outcomes are compared to the OECD average. Like that pattern, it is
consistent with Australia‘s strong recent economic and labour market performance relative to
the rest of the OECD, and to the ‗youth friendly‘ nature of its labour market. The striking
anomaly is the level of educational participation among 15 to 19 year-olds: this is both




37
  The standard deviation among jurisdictions is 19.8, compared to 13.8 in Canada and Germany, 14.3 in Spain, and
14.6 in Switzerland. The slope of the trend line fitted to the observations is 8.0 for Australia, but 4.5, 2.8, 4.4 and 2.9
respectively for the other four countries.


122                              National Agreement for Skills and Workforce Development: Performance report for 2009
appreciably below the OECD average, and since 2000 has deteriorated relative to the OECD
average due to a rate of growth in educational participation among 15 to19 year-olds that has
lagged substantially below rates of growth recorded elsewhere in the OECD. State and Territory
transition outcomes seem to vary widely relative to the OECD average. However there are at
least some grounds for believing that the spread of performance between jurisdictions might be
greater than in other federated countries.

While the analysis that has been reported here does not try to explain any suggested institutional
contributions to State and Territory transition outcomes, it does appear to be a basis for more
detailed work to try to understand why it is that some States‘ and Territories‘ institutional
arrangements might be more effective in contributing to young people‘s transition outcomes
than others.




National Agreement for Skills and Workforce Development: Performance report for 2009          123
124   National Agreement for Skills and Workforce Development: Performance report for 2009
Appendix H. National Partnership
Agreement on Youth Attainment and
Transitions: Reform activity
Under the IGA, the COAG Reform Council must report on National Partnerships that support
the objectives in National Agreements. Chapter 8 outlines the council‘s approach to this task
and provides a summary of the selected National Partnerships.

This appendix includes two components.

    Snapshot of reform activity in each jurisdiction under the National Partnership Agreement
    on Youth Attainment and Transitions. This information has been sourced from the National
    Partnership Agreements and jurisdictions‘ Implementation Plans. The snapshot summarises
    the main commitments of each jurisdiction and indicate the breadth of reform activity taking
    place under the National Partnership. This summary is not part of a comparative analysis or
    assessment of performance information and will not be repeated in future reports.
    Report of selected high-level performance information (where possible) and a statement of
    progress of each jurisdiction under the National Partnership. This information has been
    sourced from annual reports.

Table H.1         Snapshot of reform activity: National Partnership Agreement on Youth
                  Attainment and Transitions

                                                      Reform activity

 Comm              Strengthen participation requirements through changes to Youth Allowance
                   (other) and Family Tax Benefit Part A.
                   Lift qualifications with an education or training entitlement for young people
                   aged 15-24.
                   Maintain responsibility for National Career Development Initiatives and youth
                   labour market programs.

 NSW               Targeted support programs in government and Catholic schools and TAFE
                   which are locally designed and managed to engage at risk students, raise
                   retention, attainment and improve transitions to further study and employment.

                   Coordination of school effort with the School Business Community Partnership
                   Brokers and Youth Connections teams.

                   Roll-out of Transition coordinators in schools with the existing career advisors
                   and school staff to smooth transitions for young people in NSW schools.

 VIC               To maximise engagement, attainment and successful transitions, initiatives
                   include Workplace Learning Coordinators, Pastoral Care for Apprentices,
                   Improving Career Development Services, and Koorie Transition Coordinators.
                   Implementing the School Business Community Partnership Brokers program
                   along the existing boundaries of Victoria’s current Local Learning and



National Agreement for Skills and Workforce Development: Performance report for 2009                125
                                      Reform activity
      Employment Network.
      In the area of individualised, personalised support for young people at risk, the
      Youth Connections program will engage local partners with a strong emphasis
      on young people who have disengaged from education and training.

QLD   To maximise engagement, attainment and successful transitions, the focus will
      include improving economies of scale for VET in Schools through forming
      clusters, enhanced transition planning in secondary schooling and expanding
      the Early Leavers survey.
      The School Business Community Partnership Brokers program will aim to
      revitalise regional youth planning and support the establishment of sustainable
      partnerships between schools, businesses and industry.

WA    Strengthened Career Development and Youth Mentoring policy pursued
      including additional resourcing and professional development.
      In support of achieving stronger attainment outcomes for Indigenous young
      people, a training delivery capacity building program in schools and youth
      detention centres will be targeted. This professional development strategy will
      support staff to achieve upgraded industry competence and a Certificate IV in
      Training and Assessment.
      The School Business Community Partnership Brokers program will focus on
      Indigenous services, and the Youth Connections program will focus on
      ensuring young people aged 13 to 19 at risk of leaving schools or disengaging
      from education and training have access to a continuum of individualised
      support.
      Online programs such as the WA GETACCESS career services and training
      information website, with a potential mentoring support component.

SA    To maximise engagement, attainment and successful transitions, strategies
      include an industry pathways program to improve student progression to
      higher skill and qualification levels, research into destinations in the Southern
      region and supporting the Youth Compact update in regions with statistical
      and historical records of low attainment.

      The School Business Community Partnership Brokers program will focus on
      working with regional industry, including conducting an Environmental Scan to
      appraise current partnership capability.

      In the area of individualised, personalised support for young people at risk, the
      Youth Connections program will focus mostly on severely disengaged young
      people, and be highly tailored to existing services in each region.

Tas   To maximise engagement, attainment and successful transitions, the focus is
      on the improved and quantifiable monitoring of young people’s participation
      and attainment, a strengthened provider accountability model, and more
      flexible and customised approaches by providers.
      The School Business Community Partnership Brokers program will aim to
      support identified low socioeconomic status schools to develop sustainable


126            National Agreement for Skills and Workforce Development: Performance report for 2009
                                                      Reform activity
                   partnerships.
                   In the area of individualised support for young people at risk, the Youth
                   Connections program will work closely with providers to identify young people
                   and utilise different service delivery types based on levels of disengagement.

 ACT               To maximise engagement, attainment and successful transitions, the ACT will
                   engage four Structured Workplace Learning Champions, and trial targeted
                   VET in alternative programs that lead to nationally recognised training.
                   The ACT will also implement the Youth Connections and Partnership Brokers
                   programs to complement existing services.

 NT                To maximise engagement, attainment and successful transitions, the funding
                   will be used to employ three Structured Workplace Learning Coordinators to
                   source work placements for VET in Schools students.
                   School Business Community Partnership Brokers are expected to service their
                   entire region, however, where relevant, remote service delivery will focus on
                   identified Territory Growth towns.
                   In the area of individualised, personalised support for young people at risk, the
                   Remote Youth Connections will also focus on Territory Growth towns.



Table H.2         Reporting performance information: National Partnership on Youth
                  Attainment and Transitions


                                                Initial reports

 With regard to the implementation of the education/training entitlement and National Youth
 Participation Requirement, DEEWR have advised that:

      All jurisdictions have certified their implementation of the education/training entitlement
      offered for 15 to 19 year olds in effect from 1 July 2009.
      All jurisdictions have implemented the National Youth Participation Requirement, in effect
      from 1 January 2010.

      All jurisdictions have implemented the education/training entitlement offered for 20 to 24
      year olds from 1 January 2010.

      Information on jurisdictions’ implementation of the Compact is contained in their
      Implementation Plans.

 With regard to the implementation of income support changes, DEEWR have advised that:

      In place for Youth Allowance (Other) is the Social Security Amendment (Training
      Incentives) Act 2009, An Act to amend the Social Security Act 1991

      In place for Family Tax Benefit (Part A) is the Family Assistance Legislation Amendment
      (Participation Requirement) Act 2009— an Act to amend the law relating to family
      assistance, and for related purposes.


National Agreement for Skills and Workforce Development: Performance report for 2009                127

				
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