catallaxy files

catallaxy in technical exile

Another hole in the condom theory of HECS

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One of the better headlines I have received over the years was ‘Holes in the condom theory of HECS’, for an article based on my attempt at debunking (pdf) the argument that HECS reduces fertility.

I won an Ernie as a result, but I haven’t persuaded Jenny Macklin. She tells us that:

The price hikes mean that most Australian university students are now paying $20,000 for a science degree, $40,000 for a law degree and nearly $15,000 for an arts degree. Young people will graduate from university with massive debts, making it so much harder to buy a home, start a family and get ahead.

Of course none of us can say for certain how many children today’s teenage university students will have. According to the census data, the first group of women to incur HECS by the time of the 2001 census had given birth to as many children as their HECS-free or lower HECS predecessors (in my paper). More recently, a group of ANU academics has used the HILDA dataset to look at expected lifetime fertility (their paper is here (pdf). They do say ‘draft only, do not quote’ but to save you downloading it here is the crucial passage:

Neither ther size nor existence of a HECS debt is associated with either women’s or men’s ELF. However at the 10% level of significance, and for women only, having ever had a HECS debt is assocatiated with a slightly higher expected number of children. The effect is very small, somewhere between 0.136 and 0.163 children (compared to the average of 2.33) or about 6 per cent.

Even with HECS, these women still typically have more financial capacity for raising children than their less educated contemporaries. As my paper argued, the main fertility problem isn’t HECS or other financial considerations, but men – or to be more precise, a lack of suitable men. Unfortunately for Ms Macklin’s argument, cutting HECS isn’t going to make any difference to the supply of men worth marrying.

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Written by Admin

October 26, 2005 at 1:21 pm

Posted in Uncategorized

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