Economics of Education: Unemployment Impact in Australia Report

This research report investigates the impact of business cycles on educational attainment and unemployment rates in Australia. The study analyzes data from 1990 to 2017, employing statistical tools such as descriptive statistics, regression analysis, and correlation analysis to identify relationships between unemployment and the labor force. The report explores the effects of economic crises on education, referencing previous literature on the topic, and examines various factors that moderate the impact of economic fluctuations on educational outcomes, including government policies and interventions. The findings suggest a weak relationship between business cycles and educational attainment in Australia, concluding that educational policies and labor force dynamics do not significantly affect the unemployment rate. The analysis includes the use of R-squared values, significance levels, and correlation analyses to support the conclusions, offering insights into the interplay of economic factors and educational trends.

RESEARCH
PROJECT

ABSTRACT
In the present report there has been discussion based on educational system and
unemployment rate fluctuations in Australia. This educational attainment is that which is referred
by USA Census Bureau Glossary meaning highest degree of education which is completed by
individual person. So, there are many studies which show that changes and fluctuations within
business cycle will be having its impact on this educational attainment. This means that at time
when there is scarcity of market job opportunity, wages are also stagnant then there will be
decrease into opportunity cost for undertaking or pursuing education. It is evident from the
economic crisis it was seen that there was reduction in working hours, wage rates and the public
funds from government that were available. Then there are certain policies which intervened for
helping moderating the impact of economic crisis onto education of children. As per analysing
the outcomes there have been use of various statistical tools that will help in analysing proper
outcomes. It consists of identifying relationship between unemployment and labour force age
between 15-24 of Australia. There has been consideration of data base since 1990 to 2017. There
had various analyses and tests made over data base from historical data such as descriptive
statistics, regression analysis as well as correlation of data. Therefore, there is no significant
relationship between fluctuation within business cycle and attainment of education.

TABLE OF CONTENTS
TITLE..............................................................................................................................................1
INTRODUCTION...........................................................................................................................1
Aim:.............................................................................................................................................1
Objective:.....................................................................................................................................1
Research hypothesis:...................................................................................................................1
REVIEW OF PREVIOUS LITERATURE.....................................................................................2
SPECIFICATION OF THE MODEL..............................................................................................3
DATA DESCRIPTION...................................................................................................................3
EMPIRICAL RESULTS.................................................................................................................4
CONCLUSIONS & RECOMMENDATIONS..............................................................................11
REFERENCES..............................................................................................................................13

TITLE
'Economics of Education- The effects of business cycle on educational attainment'
INTRODUCTION
It is very important part by the central and state government that they are spending too much on education of youth and its
citizens (The Heterogeneous Impacts of Business Cycles on Educational Attainment, 2018). But there is higher exposure of
unemployment rate on educational attainments that is seen on many of them. This educational attainment is that which is referred by
USA Census Bureau Glossary meaning highest degree of education which is completed by individual person. So, there are many
studies which show that changes and fluctuations within business cycle will be having its impact on this educational attainment. This
means that at time when there is scarcity of market job opportunity, wages are also stagnant then there will be decrease into
opportunity cost for undertaking or pursuing education. While in certain previous studies it was also shown that there is opposite
reaction meaning that higher unemployment rate will be linked with the increase in educational attainments. So, the objective of this
topic is to find out effect of business cycle on educational attainment which is very important to study.
Aim:
To analysis the impact of business cycle on educational attainment.
Objective:
 To analysis relationship between education and employment rate within people
 To find out relationship between rate of college attendance and labour force
Research hypothesis:
Hypothesis 1
H0: There is significant relationship between fluctuation within business cycle and attainment of education
H1: There is no significant relationship between fluctuation within business cycle and attainment of education
Hypothesis 2
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H0: There is significant relationship between rate of college attendance and labour force participating.
H1: There is no significant relationship between rate of college attendance and labour force participating.
REVIEW OF PREVIOUS LITERATURE
There are many other studies which are covered within the framework of topic which includes the impact of economic crisis on
educational outcome. One of the research done by M. Najeeb Shafiq which was on measuring impact of economic crisis on
educational outcome. This was based on effects of economic crisis on children’s education whether it is positive or negative.
According to Kieling, Ulkuer and Rahman, (2011) it was concluded within this research that various factors will be helping in
moderating the effect of economic crisis one education of children. These factors will be those of condition of cash transfer, block
grants, reduction in fee and media campaigns.
It is evident from the economic crisis it was seen that there was reduction in working hours, wage rates and the public funds
from government that were available. Then there are certain policies which intervened for helping moderating the impact of economic
crisis onto education of children. There is exposer of child which will be having negative impact on them during the time of economic
recession that is directly linked with business cycle fluctuations. These negative impacts could be the pressure on parents to not
educate their children during the time when their income is low or cut down. Then the other factor being parents relaying on child
labour so this would result into loss of education to children. As per the view of Lusardi and Mitchell, (2014) the last factor which is
recognised by them could be that of parents not allowing their children to continue their studies in good and prominent schools or
colleges if their income is lower down or reduced.
Whereas on other side it could be included by the view of Colander, Lux and Sloth, (2014) there are also some positive factor
which child is exposed to when there is economic crisis. The wage rate of child will be lower down in this period this would not attract
parents to send their child on labour. While the other being if the parent is convinced that less educated child will not be getting good
work then they could turn supportive for their children education. There are very less studies which shows the effect of economic
crisis or business cycle on the outcome of educational attainment. As per the view of Boffy-Ramirez, (2017) within one of the study
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which was done on Costa Rica on crisis of 1980-83 it was noted that there was less decline of primary school enrolment as compared
to that of secondary school enrolment. This will vary from characteristic of family to which the person is belonging their upbringing,
parental education, their occupation and status in society based on income.
Then as compared to the other studies also showed which was held in Indonesia that poor children suffer more than that of rich
from the economic crisis and business cycle as well. The main reason behind this economic crisis is related to problematic monetary
and fiscal policy which will attract changes in export import policy and even natural disaster. Further it was included that these studies
which are done is mainly identifying the relationship between child labour and their education during time of economic crisis. But our
present research is done on effect of business cycle on educational attainment. So, both the study’s results could differ to great or some
extent and conclusion will also be different from each other.
Livingstone, (2018) included that government are the main link between people who are not able to attain education further
and their lack of employment. So, it is the duty of government that they are formulating some easy policies for these people who are
impacted the most by this business cycle or economic crisis as well. So, within the study it could be included that there were mostly 3
type of intervention which will help to lower down the impact of business cycle and economic crisis as well on educational attainment.
Government could make their impact on lowering down the fee of school or colleges and can also give some monetary help to
these poor people. Then other will be protecting educational outcome at time of business fluctuation and crisis which will be through
help of media campaign. Like during time of crisis of 1990 government of Indonesia launched the campaign named stay in school
which was great step in this movement. The last one is that of government providing monetary benefits to school which is called to as
block grants.
SPECIFICATION OF THE MODEL
DATA DESCRIPTION
The data which is that on educational attainment is basically drawn from the National Longitudinal Survey of Youth in year
1979 (NLSY79) this was based on individuals who are on boundary between the pursuing and not pursuing additional education. The
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individuals were of the age 17 and matching with the national and state unemployment rate. The study includes about 9 cohorts in
which 1 is oldest and 9th is youngest all of them facing national unemployment on various different rate. This will be showing the
range of age of each cohort, their size in 1979, national unemployment rate and educational attainment of each cohort in 2010. All the
data regarding rate of unemployment was taken by Bureau of Labour Statistics (BLS).
The results showed that the participants who were of older age have conducted their higher education and having experience of
job as well so the AFQT score was standardised with this age group.
EMPIRICAL RESULTS
As per analysing the outcomes there have been use of various statistical tools that will help in analysing proper outcomes. It
consists of identifying relationship between unemployment and labour force age between 15-24 of Australia. There has been
consideration of data base since 1990 to 2017. Moreover, there will be application of various tests on the data base which were made
in respect with identifying accurate analysis such as descriptive statistics, correlation and regression analysis.
Descriptive
Descriptive Statistics
N Range Minimu
m
Maximu
m
Mean Std.
Deviation
Variance Skewness Kurtosis
Statisti
c
Statisti
c
Statistic Statistic Statistic Std. Error Statistic Statistic Statisti
c
Std.
Erro
r
Statisti
c
Std.
Erro
r
Unemploymen
t rate 19 3 4 7 5.58 .192 .838 .702 -.277 .524 -.178 1.014
Labor Force 19 349431
5 9416369 12910684 11189345.7
9
259406.82
8
1130728.15
0
1278546148273.50
9 -.056 .524 -1.350 1.014
Valid N
(listwise) 19
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Interpretation: On the basis of above listed determination of the outcome which are mainly summary of the data base that have
been considers. There have been use of Labour force under age 15-24 and unemployment rate in Australia. The consideration of data
base has presented the descriptive analysis as there is average rate of unemployment which is 5.58 while in labour there are
11189345.9 mean labour force analysed over the period 1990 to 2017. Moreover, in analysing the standard deviation from the data
base which demonstrated the standard deviation in the unemployment rate of Australia is around 0.838 while in labour force it
represents 1130728.150 respectively.
Regression
In analysing the relationship between labour force of Australia and unemployment rate there has been use of regression test
over such variables. However, it will be helpful in identifying the appropriate outcomes which are to be measured for analysing their
significance differences.
Descriptive Statistics
Mean Std. Deviation N
Labor Force 11189345.79 1130728.150 19
Unemployment rate 5.58 .838 19
Correlations
Labor Force Unemployment
rate
Pearson Correlation Labor Force 1.000 -.171
Unemployment rate -.171 1.000
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Sig. (1-tailed) Labor Force . .242
Unemployment rate .242 .
N Labor Force 19 19
Unemployment rate 19 19
Model Summaryb
Model R R Square Adjusted R
Square
Std. Error of
the Estimate
Change Statistics
R Square
Change
F Change df1 df2 Sig. F Change
1 .171a .029 -.028 1146313.794 .029 .514 1 17 .483
a. Predictors: (Constant), Unemployment rate
b. Dependent Variable: Labor Force
ANOVAa
Model Sum of Squares df Mean Square F Sig.
1
Regression 675230308521.
078 1 675230308521.
078 .514 .483b
Residual 223386003604
02.086 17 131403531531
7.770
Total 230138306689
23.164 18
a. Dependent Variable: Labor Force
b. Predictors: (Constant), Unemployment rate
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Coefficientsa
Model Unstandardized Coefficients Standardized
Coefficients
t Sig. 95.0% Confidence Interval for
B
B Std. Error Beta Lower Bound Upper Bound
1 (Constant) 12479226.083 1818512.820 6.862 .000 8642499.407 16315952.760
Unemployment rate -231204.958 322533.403 -.171 -.717 .483 -911690.956 449281.039
a. Dependent Variable: Labor Force
Residuals Statisticsa
Minimum Maximum Mean Std. Deviation N
Predicted Value 10860791.00 11554406.00 11189345.79 193682.201 19
Residual -1488912.375 1818687.625 .000 1114016.765 19
Std. Predicted Value -1.696 1.885 .000 1.000 19
Std. Residual -1.299 1.587 .000 .972 19
a. Dependent Variable: Labor Force
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Interpretation:
In analyzing the data base of Labour force and unemployment rate in Australia for the period 1990 to 2017 which insist several
outcomes. Thus, as per considering the R square of data bae which presents that 0.029 that is 2.9% of the relationship has been made
among such variables. Moreover, as per analyzing the significance value which is 0.483 as it is higher than the level of P value such as
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0.05. Thus, in this case there are weak evidences against the null hypothesis. Therefore, there will be acceptance to H0 which presents
that, there is no significant relationship between fluctuation within business cycle and attainment of education. Moreover, there will be
no relationship among the Labour rate and the unemployment rate in Australia.
Correlations
Descriptive Statistics
Mean Std. Deviation N
Unemployment rate 5.58 .838 19
Labor Force 11189345.79 1130728.150 19
Correlations
Unemployment
rate
Labor Force
Unemployment rate
Pearson Correlation 1 -.171
Sig. (2-tailed) .483
Sum of Squares and Cross-
products 12.632 -2920483.684
Covariance .702 -162249.094
N 19 19
Labor Force Pearson Correlation -.171 1
Sig. (2-tailed) .483
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Sum of Squares and Cross-
products -2920483.684 230138306689
23.160
Covariance -162249.094 127854614827
3.509
N 19 19
CONCLUSIONS & RECOMMENDATIONS
Conclusion
On the basis of above research, it has been concluded that, the appropriate educational policies and labour force performing the
environment will not affect the unemployment rate in Australia. There had various analyses and tests made over data base from
historical data such as descriptive statistics, regression analysis as well as correlation of data. Therefore, there is no significant
relationship between fluctuation within business cycle and attainment of education. Moreover, there will be no relationship among the
Labour rate and the unemployment rate in Australia.
Recommendation
As per analysing the outcome which presents that, there have been various operational analysis made on gathered data that have
presented that, there is no significant relationship between fluctuation within business cycle and attainment of education. Thus, to
make necessary improvement in the Labour market of Australia and educational system there will be requirement of making
appropriate policies. Therefore, there are several recommendations which will help Australia in improving employment opportunities
such as:
 Creating new job opportunities for freshers and young employees that will help in rasi9ng the per capita income.
 Encouraging the literacy rates with the help of creating more scholarships and grants in educational system.
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 Developing schemes for SME’s operating in environment which will benefits in improving domestic production as well as
created reduction in inflationary rates.
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REFERENCES
Books and Journals:
Boffy-Ramirez, E., 2017. The heterogeneous impacts of business cycles on educational attainment. Education Economics, 25(6),
pp.554-561.
Colander, D., Lux, T. and Sloth, B., 2014. 13 The financial crisis and the systemic failure of academic economics. The Economics of
Economists: Institutional Setting, Individual Incentives, and Future Prospects, 21(2-3), p.344.
Kieling, C., Ulkuer, N. and Rahman, A., 2011. Child and adolescent mental health worldwide: evidence for action. The
Lancet, 378(9801), pp.1515-1525.
Livingstone, D.W., 2018. The Education-Jobs Gap: Underemployment Or Economic Democracy?. Routledge.
Lusardi, A. and Mitchell, O.S., 2014. The economic importance of financial literacy: Theory and evidence. Journal of economic
literature, 52(1), pp.5-44.
Online:
The Heterogeneous Impacts of Business Cycles on Educational Attainment. 2018. [Online]. Accessed through:
<http://ftp.iza.org/dp10167.pdf>.
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