Income outcomes

See how apprentices are $165,000 better off than university graduates at age 28

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Introduction

Many secondary school leavers look to university as a requirement to start a successful career. Often, this means apprenticeships and direct transition into the workforce with Industry Training Organisation (ITO) training are overlooked.

In this analysis, we track a cohort of school leavers turning 19 in 2003 until 2016, allowing us to see their incomes until the age of 32. We find that school leavers who enter ITO training have higher incomes than university graduates into their late twenties. By the age of 30 school leavers who enter apprenticeships in one of the Women in Trades ITOs had earned $145,000 more than their university counterparts. After age 30 university graduates begin to earn more than apprentices however when considering cumulative income apprentices have higher net worth into their late thirties. This is without considering student loans which averaged to be $30,000 for our 2003 cohort.

This work was conducted for the Women in Trades consortia including BCITO, Competenz, Skills Org, MITO and Connexis. These ITOs feature a higher proportion of apprenticeships training than the six remaining other ITOs. Their trainees are seperated from other ITOs in the following charts.

Yearly income

We track raw average income through IRD tax records of our cohort each year after turning 19, allowing us to see their income until they turn 32 in 2016. 

Apprentices from the Women in Trades consotia have the highest average income each year until after the age of 28 for males, and 25 for females, whereupon the average university graduates succeed as the highest earners.

Cumulative income

In terms of cumulative income, the average 28 year old male apprentice from the Women inTrades consotia has earned $135,000 more than the average university graduate. This gap in income closes going into their thirties, however by age 32 trainees are still $100,000 ahead of university graduates.

The cost of tertiary study

Over the course of their study, the average university student accumulates an average of $30,000 in student loans. When adjusting for the cost price index in 2018, that would be approximately $38,000. In 2018 the 'fees free first year' was introduced, which would lower this cost by approximately $9,000. However, it would also be applicable to ITO course fees, which are often in the range of $2000 - $4000.

To investigate individual university degrees, right-click the university bar and select 'Drill down'.

Conclusion

Entering directly into a profession from secondary school through ITO training has its benefits of earning while you learn, and avoiding accumulating a large student loan. At the age of 28, males are shown to be $165,000 ahead of their average university counterparts, when considering the extra income they are earning and the absence of large student loans.

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