FACTBase Bulletin 74 - The Relationship Between Human Capital and Employment in Greater Perth and Western Australia February 2021

The Committee for Perth is pleased to be leading research on the Future of Work for WA and Greater Perth.

Our latest FACTBase Bulletin - The Relationship between Human Capital and Employment in Greater Perth and Western Australia identifies trends in human capital within Greater Perth since 2001 and considers how changes are linked to trends in economic growth, employment and industries of employment. It also considers current human capital and higher education characteristics and the potential impacts on the future of work, the workforce and the workplace in Greater Perth and Western Australia.

In the global knowledge economy, the skills, learning, talents and attributes of a population – termed human capital – have become key to the ability of people to earn a living and of nations and cities to achieve long-term economic growth and development.

This bulletin is the fifth piece of research to be delivered under the Committee’s 2020-2021 major project the Future of Work: equipping WA and its people for the changing world of work.

Key Findings:

• Human capital is a central ingredient of competitive cities and has been associated with higher rates of productivity, creativity, innovation, social wellbeing and quality of life.
• A positive relationship was evident between human capital and labour force participation, employment and income in Greater Perth in 2016.
• Human capital in Greater Perth declined from 2011 to 2016 compared to other major metropolitan regions in Australia, particularly Melbourne and Sydney. Despite this, disparities between the human capital scores of Australia’s capital cities have fallen and the proportion of the population with a higher education qualification has increased.
• There has been a continued shift towards non-university qualifications in Greater Perth, particularly certificate III and IV, advanced diploma and associate degree level qualifications. This has been linked to the most recent mining sector associated boom between 2004 and 2015, when labour demand and the associated skill profile of the Greater Perth workforce shifted away from tertiary educated workers towards trades and technicians.
• The proportion of young people (those aged 15 to 29) choosing to enrol in higher education in Western Australia has declined compared to other states, particularly the non-mining and service economy States of New South Wales and Victoria.
• Study choices in Western Australia are responsive to short- and medium-term economic conditions, industry and employment trends, and sector reputation.
• Importing qualified and skilled workers from overseas or interstate has been an important element of human capital development in Western Australia and Greater Perth.
• In Western Australia, there has been a shift away from enrolment in mining-associated disciplines towards enrolment in the service sector disciplines of health and education. This occurred despite the ongoing importance of the mining sector to the State’s economy and continued growth in employment in the mining sector from 2015 to 2020.
• Local Government Areas (LGAs) and Statistical Area Level 2s (SA2s) in central to middle urban areas are most likely to record strong, positive human capital scores, particularly those incorporating or immediately adjacent to tertiary education institutions.
• There are areas of long-term human capital disadvantage within Greater Perth. These areas are predominately LGAs and SA2s within the south and south-west areas of the region, including Mandurah, Rockingham, Kwinana, Armadale, Serpentine-Jarrahdale and Murray.
• Government and industry intervention will be needed within Western Australia to ensure that human capital development retains pace with other major capitals and states and is adequate to meet future industry needs. Incentives to encourage higher education enrolment among youth and people from lower socioeconomic quintiles may also be required.