A Human Capital Approach to the Educational Marginalisation of Indigenous Australians, CAEPR Working Paper No. 67

Education is a key determinant at both a national and individual level for health, wellbeing and access to economic resources. Whats more, education has intrinsic benefits for those who undertake it, as well as for those around them. The standard human capital model has been used by many to understand the education decisions that individuals make, as well as the consequences of these decisions for themselves and wider society. While the standard model may seem overly simple at first glance (individuals undertake education until the predicted benefits no longer outweigh the predicted costs), when the costs and benefits from education are expanded to include the social sphere, and when uncertainty about the future is taken into account, a number of insights emerge with respect to educational marginalisation. The aim of this paper is to apply some of the insights of the human capital model to better understand the education outcomes of Indigenous Australians. Regional and individual data from the census is interpreted alongside a selection of key articles and reports in order to help understand why it is that so few Indigenous people are undertaking formal education in Australia today