Exploring Occupational and Career Implications of Human Capital Specificity: A Fine Arts Case Study A thesis submitted in fulfilment of the requirements for the degree of Masters by Research Tyler Gordon McDonald BFA, B.Ed School of Economics Finance and Marketing College of Business RMIT University December 2015 Declaration I certify that except where due acknowledgement has been made, the work is that of the author alone; the work has not been submitted previously, in whole or in part, to qualify for any other academic award; the content of the thesis is the result of work which has been carried out since the official commencement date of the approved research program; any editorial work, paid or unpaid, carried out by a third party is acknowledged; and, ethics procedures and guidelines have been followed. Tyler Gordon McDonald December 2015 1 Acknowledgements I am grateful to my parents for instilling in me the drive and work ethic needed to complete this thesis. I am especially grateful to Katherine, who inspired me to write this thesis. The research described herein was conducted under the supervision of Associate Professor Jonathon Boymal (senior) and Dr.
Bronwyn Coate of the School of Economics, Finance and Marketing at RMIT University. I’d like to thank Jonathan and Bronwyn for their patience, guidance, encouragement and limited time. 2 Abstract It has been suggested that at the heart of a degree in fine arts is a curriculum that gives students the freedom to experiment, develop their problem-solving skills, creative faculties, and the ability to conceptualize. With this in mind it stands to reason that an individual with a fine arts education should be succeeding in a knowledge-based economy that values creativity for economic growth.
However, contemporary data in Australia shows that individuals holding tertiary degrees in fine arts rate the lowest in terms of employment gained relative to other degree holders and have a negative monetary rate of return. While the aforementioned statistics are important, ex post data does not tell the full story. Treating an investment in education as a choice made under uncertainty, particularly in light of the differences between specific and general human capital, provides a more complete picture of the ex ante gains from undertaking a fine arts degree. This research maps the professional lifecycle of fine arts graduates living in Melbourne, Australia in order to examine the trade-off between higher productivity and flexibility in the labor market.
3 Table of Contents Chapter 1.2 Statement of the Problem .3 Objective and Focus of the Study .1 Human Capital Theory and the Rise of the Knowledge-Based Economy .2 The Folly of Prediction .3 Investing in Human Capital under Uncertainty .4 Importance of Flexibility in Today’s Labor Market.6 The Relevance of Returns to Artistic Practice .7 Overview of the Thesis .1 The Role of Higher Education in the Knowledge Economy .2 The ex post Returns to Completing a Higher Education Qualification .3 The Impact that the Field of Education has on the Ex post Returns .4 The Fine Arts Choice .1 Art’s High Status and the Formation of Cultural Capital .2 Non-monetary Rewards and the Work Preference Model .3 Artists are Intrinsically Motivated .5 The Uncertainty of the Educational Investment .6 Human Capital Theory .7 The Creative Class .8 The Multigenerational, Retrospective Nature of the Study .2 Sourcing the Primary Data .3 Broad Data Description .3 Likelihood of Completing the Fine Arts Course .7 Artistic Career Progression .9 Factors Inhibiting Artists’ Careers .11 Income from Creative Practice .12 Expectations of Earning Income from Creative Practice.14 Primary Occupational Sectors .15 Primary Occupation Fine Arts Related .17 Secondary Occupation Fine Arts Related .18 Human Capital Accumulation .19 Expectations of Transferability of Human Capital .3 Artistic Expectations and Practice .1 Human Capital Revisited .2 Ex ante versus ex post in Accounting for Uncertainty.3 The Nature of Human Capital in Fine Arts Graduates .4 On the Benefits and Usefulness of a Fine Arts Education in the Labor Market. 60 Appendix B: Survey Results. 78 5 Table of Figures Table 2.1 Private rates of return to a bachelor’s degree for persons in Australia: 1981-2006 (%) 22 Figure 3.1 Home Page for Blog .1 Educational qualification awarded .2 Decade of Graduation .3 Additional qualifications earned by sample .4 Proportion of respondents currently studying .5 Current state of artistic practice .6 Factors inhibiting artistic progression .1 Average annual income (decade of graduation) .7 Income derived from creative practice .8 Artistic income if primary income is in the Arts sector .9 Artistic income if secondary income is in the Arts sector .2 Order of human capital accumulation .10 Transferability of skills .11 Stage of Artistic Practice .12 Likelihood of earning a primary living through artistic practice .3 Human Capital Accumulation (Male) .4 Human Capital Accumulation (Female). 70 6 ‘Education is the great engine of personal development.
It’s through education that the daughter of a peasant can become a doctor, that the son of a mineworker can become the head of a mine, that a child of farm workers can become the president of a great nation. It is what we make out of what we have, not what we are given, that separates one person from another.’ Nelson Mandela, A Long Walk to Freedom (1995) Chapter 1. Introduction Given the large disparity in pecuniary and employment outcomes between those who complete a higher education qualification and those who opt out of formal education after leaving secondary school (see, for example, Wei, 2010; Norton, 2012), whether or not to enroll in higher education and complete a qualification is an important decision to make. Should one strike out and start building his or her career after leaving secondary school, or forego the lure of immediate earnings in favor of the higher education ‘experience’ and expected elevated income this decision may bring? To individuals thinking about how to best make their way in life it can be a difficult decision to make.
Still, the decision to enroll in higher education is only one in a long series of educational investment decisions (James, 2012). As Daly, Lewis, Corliss & Heaslip (2011) show us, while there are strong monetary incentives to complete a qualification, the field of education or specialization one chooses is also an important determinant of economic success. Plato is supposed to have remarked that knowledge is food for the soul. That may be true, but a review of the literature on graduate returns tells us that not all fields of education are equally nourishing in terms of fattening one’s wallet and protecting against periods of unemployment or underemployment.
Understanding why such an imbalance occurs is important when acknowledging the role education plays in determining economic success and in being able to provide advice to individuals who are yet to decide on a course to study in higher education. The literature on graduate outcomes describes the financial and employment implications of completing a qualification. When contemplating these returns it is important to bear in mind that this literature relies on ex post figures in support of its claims on the value of tertiary study. While governments, organizations, and individuals tend to gauge their conditions and shape their reality based on their understanding of what these indicators tell them, we must also recognize their limitations: ex post indicators are snapshots designed to capture the present circumstances of people and as such should not serve as absolute markers indicative of future successes and failures.
Ex post statistics are important, but they are limited in what they measure and susceptible to the ‘illusion’ of precision and simplicity (Karabell, 2014). Modeling expected educational returns based on ex post indicators and assumptions of perfect foresight can be misleading because it fails to consider either of the two most basic axioms of life as described by Kates (2014). These two axioms are: 1) Nobody knows the future; and 2) Everything is always in the process of change. ‘All economic decisions aside from the most trivial are about the future,’ wrote Kates (2014, p.
‘Economic decisions are built around individuals in the present trying to work out what the future will be like. And because the future is always different from how it was imagined, economic decisions often turn out to have been mistaken.’ Life is hardly predictable, few certainties exist, and actual outcomes can be significantly different from expected one. This research redresses this oversight for the field of fine arts by treating the educational investment decision as one made under uncertainty. Further, while the field of education one chooses has a potentially large effect on the extrinsic value of a qualification, it perhaps matters less than is sometimes suggested if we take a long-term focus and explore the differing levels of general 7 (flexible) and specific (inflexible) human capital accumulated by fine arts graduates.
This enables us to then consider the extent to which fine arts graduates contribute these two different types of human capital to occupations and industries beyond their immediate creative practice. By means of such an analysis this thesis assesses not only the current station fine arts graduates occupy but also allows for the consideration of the potential ‘use value’ of a fine arts education in an uncertain future.1 Portfolio Careers Anecdotal evidence suggests that most artistic skills are applicable to employment beyond of the arts (Throsby & Zednik, 2010). Indeed, one of the most useful findings in Throsby & Zednik (2010) is that artists in Australia are likely to adopt what they refer to as a ‘portfolio career.’ This means that in an effort to mitigate their income risk, artists supplement their income, often from non-arts related sources. In Throsby & Zednik (2010) between one-third and a half of the artists included in their research who identify the arts as their main occupation earned most of their income from a mix of arts- related or non-arts work.
These occupations can be either short-term contracts or on a more long-term basis, either directly within the artist’s immediate creative practice or elsewhere. The principal areas where artists have applied their artistic skills are in government, social and personal services, with large concentrations also employed in the charity, community, non-profit, health and welfare fields. Further, research in the U. by Alper & Wassall (2006) found that due to their relatively high levels of education, artists are able to make the transition from arts jobs to those in professional and managerial occupations and not service jobs (retail, hospitality etc.) as per the perception of the artistic ‘mythology.’ The results described in Alper & Wassall (2006) and Throsby & Zednik (2010) suggest three things: 1) Specialized education in the creative arts equips an individual with the skills necessary to work in a range of occupations and sectors; 2) The piecemeal acceptance by artists that it is tolerable and often necessary to earn income outside of what is normally seen as an arts or arts-related job; and 3) There is value for the artists and community alike when artists apply themselves to earning an income outside of the arts sector.2 Statement of the Problem Those who have studied learning processes throughout the ages have emphasized the importance of the creative arts in education, believing this field of education to be integral in the development of each human being.
Among other qualities, it’s been suggested that at the heart of a fine arts education is a curriculum that helps develop one’s cognitive abilities as well as general skills for life and socialization, including communicational and inter-personal skills, self-esteem, motivation, aesthetic awareness, cultural awareness, the capacity to conceptualize and solve complex problems, as well as those that help build social adaptability, harmony, and an appreciation of diversity (Winner, Goldstein & Vincent-Lancrin, 2013; Branagan, 2011).