Religion and theology degrees are a good community investment

by Paul Oslington
26th July 2020
With all the discussion of Dan Tehan’s changes to prices and government subsidies for different types of degrees, especially humanities degrees, solid evidence has rarely been deployed about the economic returns to individuals, the government budget, and the wider community. We do have evidence, for instance Andrew Norton’s old but excellent Graduate Winners study, Bruce Chapman and Kiatanantha Lounkaew’s attempt to measure the wider community benefits of higher education, and the more recent Deloitte Access Economics report commissioned by the government.

What about the degrees in religion and theology, that even among humanities degrees are commonly regarded as the most useless in terms of economic value to society? While theology as a mixture of language study, textual exegesis, philosophy and history is certainly among the humanities, it is also a professional degree in that it prepares students for church ministry, as well as jobs in social services, education and health. Employment outcomes are much better than most humanities degrees.

These degrees have an interesting history. Theology was the foundational subject when universities were founded in Europe, but in Australia for particular historical reasons has mostly been located outside our universities.

Currently degrees are offered by church affiliated theological colleges (many of which are part of consortia such as the Australian College of Theology), by a consortium that has become the University of Divinity, faith-based colleges and universities (including Avondale, Alphacrucis, ACU and Notre Dame) and by public universities (some university programs coming through adopting church colleges).

Degrees in religious studies are a more recent phenomena, with an uncertain place in the system, and taught exclusively by public universities. They include robust programs in Islamic studies, Jewish studies, and Buddhist studies. All in all, we have about 6200 students enrolled in religion and theology degrees from bachelor to PhD level, spread across over 50 institutions.

I have recently led a project to estimate the economic value of Australian religious and theological higher education. As well as expanding our evidence base for this subject area it is also significant because it was the first attempt to value private higher education, which has significantly different structure and funding arrangements to public universities. With a background in economic modelling I used benefit-cost techniques and full details are available in the report and forthcoming academic paper.

Theological education contributes to the government budget through additional taxation revenue from graduate earnings, for a much smaller government contribution than any other area of study. This net contribution to the government budget is estimated at $37 million, representing a 7.2 percent rate of return on government contributions.

The economic benefits to the Australian community, beyond the budget impact, include additional income for graduates, giving, volunteering, better health, and lower crime. These spillover benefits come through the activity of theology graduates, especially where they go on to lead churches which are social capital powerhouses. These net benefits to the Australian community are estimated to be $300 million, representing a rate of return to society on its investment of 12.7 percent.

As well as estimating benefits I also wanted to explore various policy scenarios. For instance extending eligibility for Commonwealth Supported Places to all religion and theology undergraduates would shift students from public universities to private providers with a modest net increase in enrolments. Students would gain $6.5 million, government expenditure would rise by $19 million and the Australian community would gain slightly overall.

Removing eligibility for FEE- HELP loans from religion and theology students would reduce student numbers significantly,reduce net benefits to graduates by $9.3 million, damage the budget balance by $10.3 million mostly due to lost taxation revenue, and reduce spillover benefits, with a net cost to society of $60 million. Such a policy change would be a costly ideological indulgence for the government and wider society. Other policy scenarios are detailed in the report.

Anyone with a background in economic modelling knows how sensitive such estimates are to assumptions, and the tendency for estimates in reports commissioned from consulting firms to align with the interests of the funder. Richard Denniss and many others have written on this. The data is also patchy, though QILT has been a huge breakthrough in this regard, especially as it covers private as well as public institutions.

Although the study was supported by the Council of Deans of Theology, and they along with the longstanding philanthropic trust Australian Research Theology Foundation were major funders, the assumptions underlying the estimates were conservative and this is the way the results fell, without any iterative process. Unlike some reports from consulting firms there is no proprietary model or other considerations which prevent release of the full workings for scrutiny.

Much research remains to be done, especially on the economic value of religion and theology research, and the economic value of private higher education beyond religion and theology, but I hope this study increases our evidence base and facilitates reasoned discussion of this important but neglected part of our higher education system.

What has been established is that religion and theology degrees provide an excellent return for the government and the Australian community on a very modest public investment.

This article first appeared in The Australian.

Paul Oslington is professor of economics and theology at Alphacrucis College.