2011, p.18 found that from a purely financial standpoint it makes little sense to invest in a fine arts education, and wrote that, ‘Typically, it is a very good investment decision to co
Introduction
Portfolio Careers
Anecdotal evidence suggests that most artistic skills are applicable to employment beyond of the arts (Throsby & Zednik,
Research by Throsby & Zednik (2010) highlights that Australian artists often adopt a ‘portfolio career’ to reduce income risk by supplementing their arts income with non-arts-related work Approximately one-third to half of artists in their study primarily identify with the arts but earn most of their income through a combination of arts and non-arts activities, including short-term contracts and long-term roles These additional occupations are frequently pursued within government, social, and personal services sectors, with many artists also working in charities, community organizations, non-profits, health, and welfare fields, leveraging their artistic skills across diverse industries.
Research by Alper and Wassall (2006) indicates that U.S artists, owing to their higher levels of education, are increasingly transitioning into professional and managerial careers rather than remaining in service jobs like retail and hospitality, challenging the traditional artistic 'mythology.'
Research by Alper & Wassall (2006) and Throsby & Zednik (2010) highlights that specialized education in the creative arts equips individuals with versatile skills applicable across diverse occupations and sectors, enhancing their employability and career adaptability.
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.
Statement of the Problem
Creative arts education is essential for human development, fostering cognitive growth and vital life skills A comprehensive arts curriculum enhances communication, social skills, self-esteem, motivation, and aesthetic and cultural awareness It also cultivates the ability to solve complex problems, promotes social adaptability and harmony, and encourages appreciation of diversity, making arts education a cornerstone of holistic personal development (Winner, Goldstein & Vincent-Lancrin, 2013; Branagan, 2011).
Despite the recognized value of a fine arts education and the growing importance of creativity in the labor market, fine arts graduates often face low wages and limited employment opportunities (Steiner & Schneider, 2013) Research indicates that, financially, investing in a fine arts degree may not be the most practical choice, especially in visual and performing arts disciplines (Daly et al., 2011, p.18).
Despite the relatively lower post-graduation earnings compared to other tertiary qualifications, fine arts programs in Australia continue to be highly attractive to students According to the Department of Education, these courses remain a popular choice in Australia's higher education sector, highlighting their enduring appeal despite potential financial disadvantages.
In 2013, Australia saw a 5.2% increase in the number of students commencing fine arts education compared to 2012, highlighting growing interest despite challenging economic conditions A total of 25,763 applicants for creative arts programs reflected a strong desire among students to pursue careers in art and fine arts studies This trend indicates sustained passion for arts education, even in times of economic uncertainty (Department of Education and Training, 2014).
From an economic perspective, pursuing a fine arts education may seem counterintuitive, as the immediate financial returns are often perceived as modest Economists describe this choice as a ‘confusing state of affairs’ (Abbing, 2002), prompting questions about why individuals opt for fine arts studies despite the limited economic benefits This paradox raises important considerations about the motivations behind selecting a fine arts education, suggesting that personal passion and artistic fulfillment often outweigh purely monetary incentives Ultimately, understanding this decision requires acknowledging the value of creativity and cultural enrichment beyond traditional economic metrics.
Objective and Focus of the Study
While many romantically believe that "love does it all" in intimate relationships, financial issues can threaten the foundation of love if not managed properly The dynamic between an artist and their creative practice is similar, where talent alone is rarely enough for a successful career Poverty can serve as a distraction, diminishing an artist's discipline, focus, and energy, ultimately hindering their ability to pursue their passion Proper financial attention is essential to sustain creativity and maintain the love for the craft.
Unlike vocationally oriented programs like accounting, engineering, or medicine, a clear employment pathway is less defined for fine arts students This research aims to evaluate the risk-adjusted, ex ante returns of a fine arts education, offering valuable career guidance for current, former, and prospective students The findings are particularly useful for individuals uncertain about pursuing a degree in fine arts, helping them make informed educational and career decisions.
Investing in education offers both ex post and ex ante returns, where ex post refers to the actual returns experienced after completing the investment, and ex ante involves the expected benefits before making the decision When evaluating education as an investment, individuals should consider evidence on costs and benefits, such as potential earnings and expenses, prior to enrolling in higher education This comprehensive analysis helps in making informed decisions about continuing education and maximizing future returns.
An ex ante evaluation is a continuous process rather than a snapshot of a specific moment, leveraging the insights and experiences of fine arts graduates to effectively monitor and assess the current fine arts curriculum.
A risk-adjusted return is a key measure of investment profitability that accounts for the level of risk involved, providing a clearer picture of true performance In this thesis, the data is analyzed conceptually to understand how ex ante returns should be adjusted for various risks impacting potential outcomes Considering risk-adjusted returns helps individuals, such as students choosing higher education, evaluate whether they can maximize gains while effectively managing associated risks This approach enables better decision-making by balancing potential benefits against potential risks to optimize overall investment outcomes.
This study employs a retrospective approach to examine the professional lifecycle of fine arts graduates living in Melbourne, Australia, dating back to the 1960s It focuses on individuals who hold a Bachelor’s degree or higher in fine arts, providing valuable insights into career trajectories over several decades Primary data is collected from the researcher’s own sources, offering an in-depth understanding of long-term career development among fine arts professionals in the region.
This study employs an online survey as the primary data collection method, capturing both quantitative and qualitative insights through closed and open-ended questions The survey explores key themes such as students' motivations for pursuing fine arts, post-graduation outcomes like income and employment status, and the challenges faced in maintaining artistic practice It also examines graduates' pre-course outlooks and the human capital acquired during their studies, analyzing their practical value in career opportunities and personal living conditions These comprehensive insights provide a nuanced understanding of the factors influencing fine arts students' educational journeys and career trajectories.
The survey collected data from 270 usable respondents, demonstrating a successful response rate despite restricted access to university alumni databases due to privacy concerns Participants were primarily recruited through the researcher’s personal network connections, with some leveraging ‘chain’ sampling to identify additional participants This targeted approach ensured a robust and diverse sample for the study.
The majority of the sample consists of females (65%) and individuals born in Australia (82%), aligning closely with previous findings from Throsby & Zednik (2010), which reported 63% female and 78% Australian-born artists Throsby & Zednik’s (2010) study offers valuable insights into the economic circumstances of professional artists in Australia, serving as a useful benchmark for comparing and contrasting the current research findings.
The respondents' ages ranged from 21 to 67 years, with a mean age of 38 and a median of 37, reflecting a diverse age profile The majority of participants graduated from Australian institutions, particularly RMIT University and the Victorian College of the Arts (VCA) However, the sample also includes graduates from various institutions across Australia as well as international universities in Romania, the United States, and the United Kingdom, highlighting the global diversity of the respondent pool.
In addition to the online survey, a case study was conducted with a graduate who exemplifies the thesis's core focus: assessing whether fine arts graduates develop versatile human capital that enables them to succeed across diverse industries and occupations beyond their artistic practice.
Research Questions
A review of the literature helped formulate three key research questions: First, do fine arts graduates make well-informed decisions before enrolling in their courses? Second, do they acquire more general human capital compared to specific skills? Third, does the accumulation of general human capital enable fine arts graduates to pursue diverse occupations across various sectors?
Conceptual Framework
A conceptual framework serves as an essential analytical tool that integrates concepts, assumptions, and expectations from various theories to elucidate the relationships among key study variables, guiding research questions and methodology According to Maxwell (2005), its primary purpose is to demonstrate how the research aligns with existing theories and knowledge, while also highlighting its unique contribution to advancing the field of scholarship This framework, based on established literature from Miles & Huberman (1994) and Imenda (2014), ensures a coherent structure for organizing research and informing methodological decisions, thereby enhancing the validity and relevance of the study.
This study's conceptual framework focuses on three key aspects: firstly, the application of Human Capital Theory to understand educational investments; secondly, accounting for uncertainty in the decision-making process related to educational investments; and thirdly, examining the nature of human capital and the benefits of accumulating general-purpose human capital in uncertain educational environments.
1.5.1 Human Capital Theory and the Rise of the Knowledge-Based Economy
Many economists recognize human capital as a limitless, natural resource that drives long-term economic development, with scholars like Schultz (1983) and Acemoglu & Pischke (1999) emphasizing its vital role Marshall (1920) famously stated that “the most valuable of all capital is that invested in human beings,” highlighting the significance of investing in human potential In today’s knowledge-based economy, the accumulation of high levels of human capital is essential for sustained economic growth and competitive advantage.
Investing in workers' skills leads to better employment opportunities and higher wages for individuals, enhancing their economic stability Additionally, a more skilled workforce benefits society through increased tax revenue, improved public health, and greater political engagement This investment also reduces social transfer payments, contributing to sustainable economic growth (Piketty, 2014).
Educational qualifications serve as a crucial signal to potential employers regarding an individual's abilities, supported by Human Capital Theory This framework posits that the educational process facilitates the accumulation of valuable higher-level skills applicable in the professional environment Additionally, Human Capital Theory emphasizes the significance of individuals' initial decision-making process when choosing their fields of study, as these choices directly influence their future employability and career prospects.
The literature on educational outcomes provides essential tools for decision-makers to assess potential investments in education, emphasizing the importance of ex ante return analysis based on ex post indicators such as graduate career outcomes Many ex ante evaluations rely on historical data extrapolation, for example, estimating a 5% risk of failing a course based on past failure rates or projecting future earnings of graduates, like an $80,000 annual salary for dentistry graduates, based on current data However, simple predictive models may significantly differ from actual outcomes due to future uncertainties, which are central to this study's conceptual framework and influence the reliability of projections.
In his seminal work from 1921, Risk, Uncertainty, and Profit, Chicago economist Frank Knight summed up the existence of uncertainty in our lives when he wrote that:
In a constantly changing and uncertain world, our ability to navigate life and business depends on having some knowledge of the future As Knight (1921) highlights, the core challenge is acting based on partial knowledge—neither complete ignorance nor perfect information—since life's problems often stem from limited understanding This concept underscores the importance of informed decision-making in both personal and professional realms.
Educational investment is a long-term commitment vulnerable to unexpected challenges throughout the journey to graduation and beyond As the knowledge-based economy rapidly evolves, change often outpaces our ability to gather sufficient evidence for informed decision-making Consequently, relying on models that assume perfect foresight about the future value of qualifications is unreliable in guiding educational investment decisions.
1.5.3 Investing in Human Capital under Uncertainty
Our ex ante return analysis is grounded in Human Capital Theory and the role of uncertainty in educational investment decisions This framework emphasizes the importance of linking human capital gains, which are measured across two dimensions, and considers the transferability of acquired skills A key concept in labor economics is the distinction between specific human capital, which is tied to particular contexts, and general human capital, which can be broadly applied.
Human capital varies along a spectrum from purely specific to purely generic skills (Castanias & Helfat, 2001) Highly specialized skills are developed by individuals at one end of this continuum, providing greater value within a specific occupation, company, or industry compared to other professional settings.
General human capital is highly valued by employers due to its ease of redeployment across various occupations and sectors It includes personal, interpersonal, and organizational skills, along with emotional intelligence, enabling effective communication, teamwork, and adaptability These attributes also reflect a willingness to learn and recognize technical skills that drive organizational and commercial success (Coll & Zegwaard, 2006; Coates & Edwards, 2009).
Specific human capital tends to be more productive than general human capital; however, investing in specialized skills involves inherent risks because these skills are often tied to a particular firm, occupation, or sector If the firm, industry, or occupation becomes unprofitable or the individual leaves, these skills may become obsolete, reducing their overall value Research by Castanias & Helfat (2001) and Harris & Helfat (1997) indicates that specific human capital significantly declines in value when employees switch firms due to its limited transferability.
Research by (2010) indicates that individuals with higher levels of specific human capital are more likely to transition between similar occupations, highlighting how specialized skills can limit overall worker mobility This empirical evidence suggests that the accumulation of specific human capital acts as a barrier to occupational mobility, reinforcing the importance of industry-specific skills in career transitions Understanding these dynamics is crucial for developing strategies to enhance workforce flexibility and adapt to evolving labor market demands.
1.5.4 Importance of Flexibility in Today’s Labor Market
Future employment remains uncertain, with unclear job roles and locations, leaving policy makers, businesses, and school leavers uncertain about what to expect In a rapidly evolving workplace landscape, it is essential for individuals to develop adaptable, resilient, and resourceful skills to successfully navigate challenges Equipping people with the ability to creatively respond to change and seize new opportunities is crucial in an unpredictable job market.
When facing uncertainty in educational investment decisions, accumulating higher levels of general human capital during education is advantageous According to Gervais, Livshits, and Meh (2007), this approach represents a trade-off between maximizing productivity and maintaining flexibility for reallocation later Economies relying on specific human capital tend to be more productive but also more vulnerable to economic turbulence due to the difficulty in reallocating such capital Therefore, the key factor influencing the choice of human capital investment is the level of uncertainty workers encounter when making these decisions.
The Relevance of Returns to Artistic Practice
This article explores the 'use value' of a fine arts education by integrating insights from both economics and fine arts scholarship While some argue that art and economics are fundamentally opposed—highlighting views like the Romantic perspective that art remains unworldly and separate from monetary influence—others emphasize the significant role commerce, institutional gatekeepers, and global markets play in shaping the relationship between artists and society Understanding these diverse perspectives is essential for evaluating how art interacts with economic forces and societal value.
Abbing (2002, p 38) expresses concern about the intersection of art and economics, feeling uncomfortable when his dealer sells his artwork primarily to impress others or for large sums of money He admits that as an artist, it's difficult for him to accept the commercialization of art, highlighting the ethical and emotional challenges faced by creators in a marketplace driven by profit rather than artistic value.
I am uneasy with the fact that art is measured in monetary terms.’
Research by Alper & Wassall (2006) in the U.S highlights that only a small fraction of artists achieve sustainable career success in the arts Similarly, Throsby & Zednik (2010) in Australia emphasize the challenging economic realities faced by artists, with incomes stagnating compared to other professions More than half of Australian artists living with partners rely on their partner’s income, underscoring financial dependency Additionally, artists in Australia generally earn lower incomes than all other occupational groups, including non-professional and blue-collar workers, reflecting the economic hardships within the artistic sector.
Regardless of whether or not artists feel ‘connected’ with the economic world around them, the connection is unavoidable
Understanding economic principles is essential for making informed decisions in everyday life, as we constantly evaluate benefits and costs, align actions with our goals, and plan for an uncertain future According to Kates (2014), "Having an understanding of economic matters is among the most useful areas of knowledge one can have," highlighting the importance of economic literacy in navigating life's complexities.
The pursuit of money does not undermine an artist’s dedication to their craft Heazlewood (2014, p.89) emphasizes that Australian artists must develop a sound understanding of economics to sustain their practice long-term In a capitalist, neoliberal society, artists need to adapt and coexist with economic realities, as there is roughly one artist for every eight bankers in Australia, highlighting the importance of financial literacy for artistic longevity.
Economics is essentially the study of mankind in everyday life, as Alfred Marshall stated in his 1920 book, *Principles of Economics* Many economists share this mission to understand human behavior and its societal implications Viewing economics through this lens reveals its relevance and accessibility, transforming it from a potentially intimidating subject into a vital tool for navigating society.
Overview of the Thesis
This thesis is structured into six chapters, beginning with an overview of the study's background and the research problem It outlines the conjecture, objectives, and focus of the research, emphasizing the significance of accounting for uncertainty The introductory chapter also highlights the importance of integrating artistic and economic perspectives to enrich the analysis Key research questions are proposed to guide the investigation, underscoring the interdisciplinary approach and the innovative effort to blend artistic insights with economic frameworks for a comprehensive understanding.
Chapter 2 offers a comprehensive literature review highlighting the importance of the research area by examining relevant prior studies to identify research gaps It explores key issues related to educational returns, including the role of education in the knowledge-based economy and the higher earnings faced by university graduates The review discusses the variation in economic returns across different fields of study and examines reasons individuals choose programs like fine arts Additionally, it covers foundational concepts such as Human Capital Theory, Florida’s ‘Creative Class,’ and emphasizes the significance of conducting retrospective studies to better understand educational impacts.
The literature review highlights the importance of further research into students' decisions to enroll in fine arts courses in higher education It emphasizes exploring the occupational and employment outcomes associated with this educational choice through the lens of modeling educational investment under uncertainty Understanding these factors can provide valuable insights into the value and potential career trajectories of fine arts students, informing both educators and policymakers.
Chapter 3 outlines the fundamental principles and methodological framework guiding the research, emphasizing ethical considerations and data collection approaches It details the procedures for data collection and analysis, providing justification for the chosen research design, setting, and participant selection to ensure validity and reliability of the study.
Chapter 4 presents the quantitative results of the online survey, beginning with an overview of the sample's demographic characteristics It explores key themes such as educational qualifications—including prior and post-qualifications—employment status, and occupational sectors The chapter also analyzes total income earned, with a specific focus on income from creative practices Additionally, it examines participants' ex ante outlook regarding course completion, expectations for artistic income and practice, and the development of their human capital, providing a comprehensive understanding of their professional and financial trajectories.
Chapter 5 presents the qualitative results, starting with a single case study that demonstrates how the general usage of human capital gained from a fine arts course can be applied across diverse occupations and sectors beyond the arts The chapter concludes with insights from two open-ended survey observations, revealing how participants feel their fine arts education has influenced their current work A variety of both positive and negative responses were analyzed and showcased, highlighting that while not all individuals could directly transfer their arts training to their careers, several consistent themes emerged for further exploration and understanding.
Chapter 6 concludes the thesis by highlighting the major themes identified from the data and discussing their significance It emphasizes the importance of encouraging collaboration between trained artists and sectors beyond the arts, advocating for greater openness to recruiting artist-trained individuals The chapter argues that non-art sectors can benefit significantly from the human capital developed through artistic training, fostering mutual recognition and value across diverse occupational fields.
Conclusion
Economics, as a social science, aims to quantify and measure concepts to understand what drives behavior and decision-making in a constrained world Scholars studying art and culture valuation recognize that prices often do not reflect true cultural value, emphasizing the importance of looking beyond monetary figures While quantitative data provides valuable insights, it is crucial to acknowledge their limitations and consider what these numbers do not reveal, as this influences individual decisions, including investments in fine arts education.
Literature Review
The Role of Higher Education in the Knowledge Economy
Most students today choose to enroll in higher education primarily driven by employment considerations, rather than consumptive reasons A 2009 study by the Australian Bureau of Statistics (ABS) revealed that approximately 75% of recent bachelor's degree graduates cited job-related motivations as their main reason for studying This highlights the increasing importance of employment prospects in students' higher education decisions.
The Australian economy has seen traditional industries diminish significantly, giving way to a more knowledge-based economy, a trend shared across developed nations Future employment opportunities in Australia are expected to demand higher skill levels, as low-skilled jobs decline during economic restructuring (Australian Workforce and Productivity Agency, 2012) Consequently, obtaining higher education qualifications is increasingly regarded as a vital strategy for securing stable, fulfilling employment in the evolving job market.
The knowledge economy emphasizes the need for well-equipped workers, highlighting the crucial role of universities in preparing individuals to meet the evolving and complex demands of the modern workplace (Andrews & Higson, 2008; Group of Eight, 2014).
This research maps the professional lifecycle of fine arts graduates in Melbourne to highlight the value of their skills to the nation's economy Literature, including Guetzkow (2002), emphasizes that the arts contribute significantly to both personal development and community prosperity Notably, arts-integrated school curricula are believed to enhance academic performance and discipline (Fiske, 1999; Remer, 1990), while arts initiatives can revitalize neglected neighborhoods and promote economic growth (Costello, 1998; SCDCAC, 2001; Stanziola, 1999; Walesh, 2001) Participation in the arts is also associated with improved physical and psychological well-being (Baklien, 2000; Ball & Keating, 2002; Bygren, Konlaan & Johansson, 1996; Turner & Senior, 2000), and the arts serve as catalysts for building social capital and achieving community goals (Goss, 2000; Matarasso, 1997; Williams).
The ex post Returns to Completing a Higher Education Qualification
Estimating the returns to education is a longstanding focus in labor economics and the economics of education, given its significance for both students and governments The financial benefits of higher education are particularly emphasized due to their impact on future tax revenues and graduates’ ability to repay student loans and other debts Extensive research, including numerous studies by Heckman, Lochner, and Todd (2005), has dedicated itself to analyzing income and employment outcomes for individuals with higher education qualifications According to Heckman et al., “Almost daily, new estimates of ‘rates of return’ to schooling are reported, based on numerous instrumental variables and ordinary least squares estimates,” highlighting the ongoing importance of accurately measuring the economic benefits of education.
Completing a higher education qualification is a highly valuable investment for individuals, as it significantly boosts earning potential (Daly et al., 2011) According to the Graduate Skills and National Productivity report by the Group of Eight, full-time workers with a Bachelor’s degree earn at least 75% more than those with only secondary education at nearly every age The report highlights that graduate wages consistently surpass school leavers’ earnings, emphasizing the financial benefits of obtaining higher education Vocational training offers a moderate earning advantage, positioned between secondary education and university degrees.
While the graduate premium, which measures the wage difference between individuals with and without higher qualifications, provides a straightforward view of the economic returns to education, it is not the most comprehensive measure For example, Norton (2012) found that Australian women with a bachelor’s degree earn approximately A$800,000 more over their lifetime compared to those who only completed secondary school, with men earning about A$1.1 million more However, calculating the private, or internal rate of return, offers a more informative perspective by considering both the costs and benefits of education According to Daly et al (2011), this approach provides a more complete picture of financial benefits after the fact, as it accounts for direct costs like tuition and indirect costs such as the time spent outside of the workforce during education.
Numerous Australian studies demonstrate the significant financial returns associated with investing in education Research by Daly et al (2011) highlights key examples, including works by Miller (1982), Maglen (1994), Daly & Jin (1997), Chapman & Salvage (1997), Borland et al (2000), Borland (2001), Larkins (2001), Daly, Fleming & Lewis (2004), Lewis, Daly & Fleming (2004), Leigh & Ryan (2005), Leigh (2008), Daly & Lewis (2010), and Wei (2010) Consistently, these studies reveal a positive monetary incentive to pursue educational investment, emphasizing the economic benefits of higher education.
Table 2.1 Private rates of return to a bachelor’s degree for persons in Australia: 1981-2006 (%)
Higher education qualifications significantly improve employment outcomes and earnings, providing a substantial advantage in the labor market (ABS, 2004; Wyn, 2009; Wei, 2010; ABS, 2012) In Australia, nearly 86.2% of working-age individuals with a post-school qualification are employed, compared to 68.9% of those without such qualifications (Australian Workforce and Productivity Agency, 2012) Additionally, individuals whose highest qualification is a Certificate I/II experience higher long-term unemployment rates (26%) than those with a bachelor’s degree or higher (13%), highlighting the positive impact of higher education on employment stability (ABS, 2012).
Individuals without higher education qualifications are generally at a disadvantage in the labor market compared to those with such qualifications, due to factors like economic fluctuations affecting lower-skilled workers more significantly Higher skilled workers are often retained by organizations because they are more expensive to replace, and lower-skilled workers tend to have less mobility, relying heavily on local job opportunities Additionally, approximately 25% of discouraged job seekers not actively searching for work cite a lack of necessary schooling, training, skills, or experience as the main reason for their employment status, highlighting the impact of educational and skill deficiencies on employability (Australian Workforce Productivity Agency, 2012).
The Impact that the Field of Education has on the Ex post Returns
The financial and occupational benefits of higher education vary significantly across different fields, with some professions offering much higher returns than others For instance, mining engineers tend to have higher earnings compared to nurses in public hospitals or primary school teachers Norton (2012) emphasizes that this variation exists not only across disciplines but also within them, such as corporate lawyers earning substantially more than family lawyers Ultimately, an individual's chosen university subject plays a crucial role in determining their earning potential, highlighting the need to consider field-specific differences when evaluating the financial returns of education (Kelly, O’Connell & Smyth, 2010).
Daly et al (2011) analyzed cross-sectional Census data in Australia to examine the relationship between educational attainment and median earnings across different higher education fields Their findings reveal a generally positive correlation between obtaining a qualification and increased earnings, outperforming the long-term real bond rate of 2 to 3 percent However, the study also indicates that not all students experience significant financial benefits from their qualifications, highlighting variability in the economic returns of higher education.
The highest rates of return for men were observed in Dentistry, Nursing, Commerce, Law, Economics, and Information Technology, indicating strong earning potential across these fields For women, the most lucrative careers included Dentistry, Medicine, Commerce, Law, Economics, and Information Technology, highlighting these professions as excellent choices for maximizing future income Both men and women benefit from pursuing careers in Dentistry, Commerce, Law, Economics, and Information Technology, which offer the highest financial returns.
According to Daly et al (2011), the visual and performing arts are the only qualifications that demonstrate a negative internal rate of return and net present value for both males and females They concluded that investing in this field is not financially advantageous, noting that, “it is a very good investment decision to complete a Bachelor degree with the obvious exception of visual and performing arts” (Daly et al., 2011, p.18).
According to Grad Stats (2013), Art and Design graduates under 25 earned a median starting salary of A$40,000 in their first year This salary position places them above pre-registered pharmacy graduates in terms of initial earnings, highlighting the earning potential for recent Art and Design graduates.
According to Beyond Graduation (2013), three years after graduation, Creative Arts graduates—regardless of gender—had the lowest earning potential among all tertiary education fields The study highlights that Creative Arts graduates consistently earned the lowest median salaries compared to other disciplines, emphasizing the financial challenges faced by graduates in this field.
In 2007-08, the median total income for artists was approximately $35,900, with a median creative income of just $7,000, highlighting the financial challenges faced by artists In comparison, workers in other occupations earned significantly higher median incomes, underscoring the income disparity within creative fields.
$43,300 for all employees, $61,700 for professionals and $77,500 for managers
Artists have not benefited from the recent rise in real incomes observed across the broader workforce According to Throsby and Zednik, creative income for artists remained stable between 2000-01 and 2007-08, while overall workforce incomes increased by approximately 16 percent in real terms during the same period.
Grad Stats (2013) highlights that graduates in fields such as medicine (96.9%), pharmacy (97.6%), mining engineering (96%), surveying (86.5%), electrical engineering (86%), and civil engineering (85.4%) enjoy strong employment outcomes shortly after graduation Conversely, graduates in life sciences, social sciences, languages, psychology, humanities, architecture, physical sciences, and chemistry are more likely to be seeking employment during the same period, reflecting varying employment implications across different fields.
Fine arts graduates face significant employment challenges, with only 48.3% securing full-time jobs according to Grad Stats (2013) They also have the highest percentage of individuals seeking full-time employment without currently working (19.3%) and those juggling casual work while searching for full-time roles (32.5%) Overall, 51.7% of fine arts graduates are actively seeking full-time employment, highlighting the greater employment instability within this field.
Despite the limited immediate financial and employment benefits of earning a fine arts qualification, enrollment in fine arts courses at the higher education level remains robust Notably, there was a 5.2% increase in new fine arts students in Australia in 2013 compared to 2012, indicating sustained interest in the field despite challenging employment prospects (Department of Education and Training, 2014).
In 2013, the Department of Education and Training reported increases in commencing students across most broad fields of education compared to 2012 Notably, Mixed Field Programs saw a 14.0% rise, while Engineering and Related Technologies increased by 10.5% Other significant growth areas included Information Technology (8.3%), Health (7.6%), and Management and Commerce (5.7%) Additionally, Society and Culture experienced a 4.7% increase, Natural and Physical Sciences rose by 4.3%, and Agriculture, Environmental, and Related Studies grew by 2.6% Education programs saw a modest rise of 2.5%, with Architecture and Building up by 1.3%, and Non-award courses experienced a slight increase of 0.6%.
Despite the strong enrollment figures in fine arts programs, ex post indicators seem limited in capturing the true appeal of a fine arts education This contrasts with earlier findings that most students pursue higher education primarily for employment prospects.
The Fine Arts Choice
Choosing to enroll in a fine arts course can be driven by complex motivations beyond pure self-interest, which traditional economic theories like Homo economicus may not fully capture While economic principles suggest that incentives influence behavior and decision-making, these models often emphasize rationality and utility maximization rooted in price responses However, critics argue that such theories are overly simplistic when applied to creative pursuits like art, which involve intricate motivations that cannot be solely explained by economic incentives This highlights the importance of considering psychological, emotional, and intrinsic factors that drive individuals to create and engage with art, making fine arts education valuable for fostering personal expression and cultural enrichment beyond purely economic calculations.
Deciding to pursue a fine arts course in higher education is influenced by multiple factors, and these motivations are often complex and multifaceted Key reasons include a passion for creativity and artistic expression, a desire to develop specialized skills, and the aspiration to build a career in the arts industry Additionally, personal interest and intrinsic motivation play significant roles, along with the pursuit of recognition, cultural enrichment, and the potential for financial stability through artistic success Understanding these core motivations is essential for comprehending why students choose to enroll in fine arts programs.
2.4.1 Art’s High Status and the Formation of Cultural Capital
Art is perceived as not only pleasurable but also noble, often linked to social status and virtue Pinker (1997) noted that in certain social circles, admitting unfamiliarity with renowned writers or preferring popular music over classical compositions like Gershwin can be seen as shocking This association of art with social respectability aligns with Bell’s (1947) concept of ‘sartorial morality,’ which suggests that individuals derive respectability from symbols of a refined, often futile, existence detached from everyday necessities.
Abbing (2002) suggests that the high societal status of art strongly motivates individuals to pursue arts education, comparing it to the clergy's revered position Like spiritual pursuits, many are fascinated and conflicted about discovering their calling, which parallels the quest for a career in the arts Furthermore, Abbing (2002) found that artists, similar to the clergy, earn less from the market compared to other professions requiring similar training, though they often receive more through gifts and donations.
Bourdieu’s concept of cultural capital explains why many individuals pursue fine arts courses in higher education, driven by the human desire for social acceptance and status Cultural capital extends beyond economic assets to include symbolic elements such as skills, tastes, clothing, mannerisms, possessions, and credentials, which influence social mobility and group belonging These cultural assets enable individuals to access and gain acceptance within specific social classes, reinforcing their collective identity Ultimately, people are motivated by the need to connect with others who share similar cultural tastes and social aspirations.
Bourdieu’s concept sheds light on how individuals construct their identities through cultural practices and social positions It explains why certain people are attracted to studying fine arts in higher education, given art’s high societal status and symbolic capital Understanding this perspective reveals the influence of social class and cultural tastes in shaping educational choices, highlighting the role of art’s prestige in motivating students to pursue a fine arts course.
Building on Bourdieu’s theory, Di Maggio and Mukhtar (2004) highlight that specific groups possess parochial knowledge regarded as prestigious, such as expertise in medicine or computer science, though often limited to narrow circles They emphasize that the arts, particularly high arts, are central to cultural capital because they are institutionalized by states and educational institutions, providing a visible symbol of prestige Examples like museum displays and decorative art in offices serve as tangible indicators of cultural capital, reflecting an individual’s or group's social status within society.
The elevated status of fine arts contributes to its appeal as an educational field despite challenging career outcomes Abbing (2002) emphasizes that preserving this high status is crucial for the continued attractiveness of fine arts courses Artists are encouraged to share a general skepticism towards pursuing monetary gain through art, reflecting the complex relationship between art and the economy While many artists do not claim to create art for financial reasons (Frey, 2012), maintaining a focus on artistic integrity over monetary gain is essential to uphold the art's revered status and enduring allure (Abbing, 2002).
2.4.2 Non-monetary Rewards and the Work Preference Model
At the core of an economic approach to understanding human behavior and decision-making are incentives, but as
Cowen (2008) highlights that incentives extend beyond monetary rewards, emphasizing that money alone is not always the most effective motivator While historically, financial incentives may have influenced actions like Judas's betrayal of Jesus or the corrupt practices of New York’s Tammany Hall, their effectiveness depends on context Excessive or harsh use of monetary rewards can serve as a disincentive, as people may feel controlled and develop resentment This underscores the complexity of human motivation, which is driven by a combination of external incentives and internal factors.
External incentives like bribery can negatively impact creative individuals by prompting them to work harder but producing lower-quality, error-prone, and less innovative work, as highlighted by Amabile (1983) She explains that rewards shift attention away from the creative process toward superficial environmental factors, reducing originality This phenomenon aligns with the concept of moral hazard in economics, where one party benefits from risk-taking while another bears the costs For instance, artists accepting commissions for fixed payments may compromise their creative quality, feeling less motivated to challenge themselves since their remuneration is predetermined Implementing external rewards in creative settings may therefore diminish genuine artistic innovation and originality.
At the request of Amabile and her colleagues Phillips and Collins, 29 professional artists sent them 10 commissioned and
A study involving 10 non-commissioned artworks revealed that art experts, unaware of which pieces were commissioned, consistently rated the non-commissioned works as more creative and of higher quality Despite the subjective nature of this research and its limited rigor, the results aligned with expectations, suggesting that non-commissioned art may foster greater originality and artistic excellence (Torr, 2008).
Throsby (2011) emphasizes that true artists create art regardless of financial circumstances, believing that their innate artistic passion enables them to overcome economic obstacles Citing John Ruskin’s 1857 lecture in Manchester, Throsby highlights the enduring dedication of authentic artists to their craft despite financial challenges, underscoring the innate drive that sustains creative production against economic hardships.
A skilled painter will deliver exceptional work if provided with simple essentials like bread, water, and salt, demonstrating their dedication and craftsmanship In contrast, an unskilled painter will produce subpar, hurried results regardless of luxurious surroundings, such as a palace or princedom This highlights that true artistry depends on the passion and talent of the painter, not merely the luxury or resources provided.
I deeply respect the great painter, not out of disdain but out of admiration, reflecting genuine honor It is essential to recognize that enhancing his financial wealth does not contribute to his respectability or happiness, similar to how enriching Shakespeare's legacy does not necessarily increase his artistic value Prioritizing artistic integrity over material gains ensures that true respect and admiration for creative masters remain authentic and meaningful.
Milton were alive, I should think we added to their respectability, or were likely to get better work from them, by making them millionaires.’
Prospective fine arts students often believe that pursuing a fine arts course can mitigate labor market disadvantages through greater job satisfaction derived from non-pecuniary rewards Artistic work is considered highly attractive due to its diverse tasks, personal autonomy, opportunities for self-actualization, unique lifestyle, sense of community, low routine, and social recognition According to Menger (1999), these measurable dimensions of job satisfaction make a career in fine arts appealing despite potential financial challenges, highlighting the intrinsic rewards that come with creative professional work.
The Uncertainty of the Educational Investment
To evaluate the financial advantages of obtaining a higher education qualification, analyzing current income levels of individuals with specific credentials using cross-sectional data provides a clear overview of potential returns (Daly et al., 2011) However, these analyses often neglect the inherent risks associated with educational investment, which can significantly impact the overall profitability and decision-making process (Altonji, 1993).
Uncertainty plays a crucial role in analyzing educational investments, as many assumptions are necessary to interpret ex post income figures as the expected earnings for individuals just starting that qualification This is particularly important because decisions about education are often made at a young age, when individuals have limited insight into labor market conditions According to Groot & Oosterbeek (1992), teenagers typically lack substantial knowledge about employment opportunities and potential returns on their educational investments, highlighting the importance of accounting for uncertainty in such decision-making processes.
Hussey & Swinton (2011) conceptualized the educational investment decision as an uncertain investment with varying probabilities of successful graduation, rather than merely estimating the returns of obtaining a college degree They highlighted that prospective students often have limited knowledge about the content and value of a particular field of study and may experience changing preferences over time, which can influence their engagement and persistence Additionally, the likelihood of graduation varies across institutions, with higher-quality, more selective schools typically achieving higher graduation rates Factors such as parental income, attachment to the institution, and access to financial aid also significantly impact the probability of completing a degree (Horn, Kojaku & Carroll, 2001).
Educational investment decisions involve significant uncertainty, as they are influenced by long-term expectations of future wages, job opportunities, business cycles, employment rates, tax policies, political stability, and personal circumstances, all of which can change considerably over time.
Prospective fine arts students face significant uncertainty regarding their future career prospects According to Alper & Wassall (2006), aspiring artists are aware of the long-standing disparities in the labor market, which have persisted for over sixty years, highlighting the clear disadvantages of pursuing a career in art Despite this, these realities are often overlooked or ignored, emphasizing the ongoing challenges faced by future fine arts professionals.
According to Abbing (2002), information about the arts is often incomplete, leading prospective artists to face greater uncertainty compared to other professionals Many young aspiring artists have only a vague understanding of what a career in the arts entails, particularly regarding competition in galleries and the importance of talent and personal abilities He suggests that even if these aspiring artists possessed some awareness of these factors, they are unlikely to accurately assess their chances of success, which could explain why fewer people choose to pursue fine arts programs.
Because of uncertainty an ex ante analysis may differ considerably from the ex post returns Heckman, Lochner, & Todd
Research by 2005 highlights significant discrepancies between predicted (ex ante) and actual (ex post) returns to education in the USA, emphasizing the evolving value of educational investment In Australia, Daly, Fleming, and Lewis (2006) found that the actual returns to higher education for students beginning their degrees in 1986 surpassed initial predictions, as the economic benefits of skills increased throughout the 1990s.
In a constantly changing economy, process of change never ceases, with some shifts being visible and others virtually invisible or unknown, such as future innovations or natural disasters (Kates, 2014) When considering educational investments amid economic uncertainty, it is crucial to recognize that ex post statistics on returns to higher education can be misleading or require cautious interpretation.
Human Capital Theory
Human Capital Theory is the leading economic explanation for the existence of graduate premiums, emphasizing the value of education in enhancing individual productivity Originating from Adam Smith's foundational ideas in *The Wealth of Nations* (1776), this theory laid the groundwork for understanding education as an investment in human capital Fisher (1906) expanded the concept by including human capital within the broader scope of all capital forms, establishing a comprehensive logical foundation Mincer (1958) further popularized the term "return" in the context of human capital, highlighting the measurable benefits of educational attainment on earnings and economic growth.
‘human capital’ in the Journal of Political Economy Becker (1964), though, is generally credited with formally developing the analytical framework of human capital (Kiker, 1966; Tan, 2014)
Human capital is defined as the productive wealth embodied in labor, skills, and knowledge (OECD, 2001) It encompasses both inherent traits and acquired skills that reside within individuals, significantly contributing to their overall productivity (Garibaldi, 2006) Understanding the value of human capital is essential for organizations and economies aiming to enhance workforce capabilities and drive sustainable growth.
Derived from the neoclassical economic perspective, Human Capital Theory posits that individuals invest in education primarily to secure future financial and non-financial benefits rather than immediate enjoyment or noble pursuits According to Tan (2014), this theory assumes that acquiring knowledge and skills—or human capital—enhances workplace productivity and leads to higher wages, as wages are ideally determined by productivity in a competitive labor market People continue to invest in education until the marginal benefits equal the private costs, accounting for diminishing returns, which results in a positive correlation between education and earnings.
Some liberal academics have criticized the term "human capital" due to its negative connotations of viewing humans as mere capital or slavery Blaug (1992) highlighted that even before the 20th century, liberal philosophers like J.S Mill emphasized that humans are not wealth but the purpose for which wealth exists (Mill, 1909) Additionally, Tan (2014) noted that Schultz (1959) dismissed critics of Human Capital Theory as sentimentalists, defending the economic value of investing in human skills and knowledge.
Human capital is inherently non-assignable, as ownership cannot be separated from its original owner Its development and utilization are driven by complex human relationships that often involve agency-type issues Williamson’s 'hold-up' problem highlights how relationship-specific performance expectations create risks, since human capital investments are tied to particular economic relationships and motivations For example, firms investing in an employee’s specific skills face the risk that the employee might leave and take the invested human capital elsewhere, underscoring the unique, non-transferable nature of human capital ownership.
This research examines the nature and use value of human capital that fine arts graduates develop during their studies, especially in uncertain future careers Becker (1964) differentiates human capital into two types: general human capital, which is valued across all employers, and firm-specific human capital, which has value only within a particular organization The study investigates which types of human capital fine arts graduates accumulate and their relative extent Additionally, Tang & Wang (2012) suggest that higher levels of general human capital, being more adaptable, enable employees to transition more easily between occupations and industries.
Investing in uncertainty requires analyzing the different levels of human capital acquired by fine arts graduates This approach enables a clearer, risk-adjusted ex ante outlook for evaluating their future opportunities and potential benefits.
The Creative Class
This section describes the important role that the accumulation of general usage human capital and Florida’s (2002)
In the dynamic and uncertain landscape of the knowledge economy, the 'Creative Class' plays a crucial role Furlong emphasizes that preparing young people for the modern world requires nurturing creativity, as technical skills alone are insufficient To thrive in this complexity, individuals must develop a broad range of creative faculties, enabling them to adapt and succeed in an increasingly knowledge-driven economy.
Australia’s expanding educated workforce increasingly aligns with Florida’s ‘Creative Class,’ a socio-economic group that leverages creativity and diverse knowledge to address complex problems As the economy shifts from agriculture and heavy industry to a knowledge-based model, the importance of creativity in economic growth has grown significantly This transformation has led to a rise in the market value of creative professionals, highlighting the vital role of the ‘Creative Class’ in Australia’s modern economic landscape.
Human capital, encompassing human ingenuity and creativity, is an unlimited global resource that surpasses traditional physical resources like land, labor, and capital, as it can be reproduced cheaply or at no cost and resists the law of diminishing returns Since Florida’s 2002 publication, there has been a surge of academic interest in leveraging creativity for economic growth, emphasizing its significance Glaeser (2004) highlighted that “creativity is to the 21st century what the ability to push a plow was to the 18th century,” underscoring the transformative power of innovation in modern economies.
According to Wyn (2009) in the Australian Education Review, creativity is a ‘must-have’ skill essential for solving real-world problems and making sense of the 21st century Supporting this view, the 2010 IBM Global CEO Study revealed that CEOs value creativity more than rigor, management discipline, global thinking, integrity, or vision, considering it the most important attribute for successfully navigating our increasingly complex world.
Florida (2002) describes the 'super-creative core' of his 'Creative Class' as comprising scientists, engineers, university professors, poets, novelists, artists, entertainers, actors, designers, and architects This diverse group is essential for driving innovation and economic growth in creative economies Their creativity, expertise, and artistic talents are vital contributors to regional development and competitive advantage Focusing on the super-creative core highlights the importance of fostering a vibrant, innovative, and diverse workforce for sustainable economic success.
Thought leadership in modern society encompasses nonfiction writers, editors, cultural figures, think-tank researchers, analysts, and other opinion leaders who drive innovative ideas These key creators develop new forms, strategies, or designs that are highly transferable and broadly applicable—such as designing widely manufacturable products, formulating versatile theories or strategies, or composing music that can be performed repeatedly Their work fosters innovation and dissemination across various fields, contributing significantly to cultural and societal progress.
Aside from Florida’s seminal work connecting creativity and the economy, others such as David Brooks’ Bobos in
Paradise (2000) and Ross Honeywill’s NEO Power (2006), have also effectively highlighted the significance of creative workers in our knowledge-based economy
Florida’s ‘super-core’ ‘Creative Class’ is clearly represented by its fine arts graduates, embodying the qualities essential for driving innovation and cultural development According to a 2008 report titled *The Art of* released by Nesta (formerly NESTA, the National Endowment for Science, Technology, and the Arts), these individuals play a pivotal role in fostering creativity and economic growth.
Fine arts graduates from the University of Arts, London, possess crucial skills such as creativity, team-working, and independent learning that are essential for the UK’s knowledge-driven economy Their ability to create new, usable knowledge extends beyond artistic practice, supporting and stimulating economic growth A survey and interviews with over 500 graduates revealed that these transferable skills are increasingly important in fostering innovation and driving economic contributions across various sectors According to findings posted on Nesta’s website, the skills of fine arts graduates are of growing importance to the UK economy, highlighting their role in supporting creative industries and knowledge-intensive activities.
Fine arts graduates tend to favor interpretive work methods over analytical ones, which, according to Oakley et al (2008), foster a creative environment conducive to economic development through innovation While analytical approaches reduce ambiguity and uncertainty, Lester & Piore (2004) emphasize that ambiguity is crucial for generating new ideas This ability to tolerate ambiguity and uncertainty underscores the vital role fine arts graduates play in driving innovation Oakley et al (2008) highlight that embracing ambiguity encourages meaningful conversations and preserves potential innovations, as narrowing discussions too early can result in missed creative opportunities.
Creativity is a widely discussed concept that is often misunderstood or misinterpreted, encompassing multiple meanings and applications It is more than just the ability to generate new ideas or objects, reflecting its complex and evolving nature Although numerous variations and definitions of creativity have been proposed over time, a clear and universally accepted definition remains elusive Despite ongoing efforts to define creativity, its fundamental essence continues to elude us, highlighting the complexity of this essential human trait.
Creativity is a complex and often ambiguous concept, much like Florida’s diverse socio-economic groupings Peck (2005) criticized the so-called ‘Creative Class,’ suggesting it functions more as a neoliberal strategy for economic development than a genuine representation of creative individuals Additionally, the definition of who qualifies as an artist remains a contentious issue, complicating efforts to understand and support creative communities.
Defining creativity and determining who qualifies for Florida’s ‘Creative Class’ can be challenging, but holding a fine arts degree indicates a significant engagement with creative thought and conceptualization Fine arts graduates, whether they work as sculptors, photographers, or in roles like retail management, accounting, or bartending, can act as catalysts for a thriving economic future Their qualifications provide an objective foundation for exploring the connection between developed creative abilities, the knowledge they generate, and employment in the knowledge-based economy.
The Multigenerational, Retrospective Nature of the Study
Contemporary work trends often result in slow career progression for higher education graduates, with it taking years after graduation for the full benefits of their education to manifest (Purcell, Elias, Davies & Wilton, 2005) This highlights the need for long-term, multigenerational studies to effectively monitor graduates' career development over time.
Research from the UK indicates that improvements in graduates' labor market conditions tend to be slow, often taking three to four years post-graduation (Purcell et al., 2005) A review of international studies by Coates & Edwards (2008) supports this, highlighting that despite the gradual pace, university graduates generally achieve favorable employment outcomes over time (Finnie, 2000, 2004; Allen & van der Valdan, 2008; Little, 2008; Bradburn, Nevil & Forrest Cataldi, 2006).
Conclusion
This literature review highlights key themes relevant to this study and sets the foundation for the research It discusses how the inputs are used to develop a conceptual framework for risk-adjusted, ex ante return analysis in higher education investments The research examines factors motivating individuals to pursue higher education, the uncertainties involved in this decision-making process, and the human capital gained during the degree Additionally, it explores the practical value of this human capital in improving employment prospects and living standards.