Each year a bunch of smart cookies check in with a swathe of Aussie households and individuals to see how their lives have changed.
It’s part of the Household, Income and Labour Dynamics in Australia Survey (HILDA), which maps the average life course of Australians to get a feel for how we’re developing as a country.
It always makes interesting reading, with a lot to learn in the financial space as the survey casts an eye across the income, wealth and labour dynamics that impact us all.
Leafing through this year’s paper, a couple of findings stick out for the financially savvy, including the optimal time to move out of home and the most financially effective education courses to pursue.
According to HILDA, the sweet spot to move out of home is between the ages of 21 and 24, which achieves the greatest income and wealth in later adulthood. Either side of that bracket and research says you’re going to wind up with less money.
“Negative effects on income and wealth associated with moving out of home before the age of 18 are particularly large,” the findings read. “Relative to moving out at age 21-24, there are also negative effects of moving out at age 18-20 or age 25 and over.”
While no specific explanations are put forward for this outcome, logic says that getting a house with your mates at 18 is bad for your wallet (and liver) and remains that way. As for 25 or over, you’ve probably had your shirts ironed for too long and failed to learn to fend for your own finances.
Regardless of where you’re placed on that predictor of financial success, you can probably quash the outcome by picking the right course of education. As you might have guessed, the HILDA research team found that earnings of full time employees are strongly related to level of educational attainment and university type.
“Compared with attainment of Year 11 and below, a master’s degree or doctorate increases earnings by 47 per cent for men and 42 per cent for women,” the paper claims.
“A graduate diploma or certificate increases earnings by 45 per cent for men and 35 per cent for women, a bachelor’s degree increases earnings by 41 per cent for men and 32 per cent for women, and a diploma or advanced diploma increases earnings by 29 per cent for men and 8 per cent for women.”
Those are some big pay gaps we’re looking at, both in terms of employment and gender imbalances for educational equivalents. We’ve tackled the latter issue previously on The Hip Pocket, so pick that up here if it rankles you too.
The HILDA research goes on to dig into all facets of life in Australia, not just finances, so if you’re keen to learn more about the way we’re changing, check out the full report.