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,
In Australia, many artists adopt a 'portfolio career' to reduce income risk by supplementing their earnings with non-arts related work According to Throsby & Zednik (2010), between one-third and half of artists who consider the arts their main occupation derive most of their income from a combination of arts and non-arts jobs These roles can be short-term or long-term and may relate directly to their creative practice or be found in other sectors Notably, artists often apply their skills in government, social services, and the charity sector, with significant employment in community, non-profit, health, and welfare fields.
Research by Alper & Wassall (2006) indicates that artists in the U.S., owing to their higher education levels, are more likely to transition into professional and managerial roles rather than service jobs, challenging the common perception associated with the artistic 'mythology.'
Specialized education in the creative arts provides individuals with essential skills applicable across various occupations and sectors, as indicated by the findings of Alper & Wassall (2006) and Throsby & Zednik (2010).
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
The creative arts play a crucial role in education, significantly contributing to the holistic development of individuals A fine arts curriculum enhances cognitive abilities and fosters essential life skills, including communication, interpersonal skills, self-esteem, and motivation Additionally, it promotes aesthetic and cultural awareness, problem-solving capabilities, social adaptability, harmony, and an appreciation for diversity (Winner, Goldstein & Vincent-Lancrin, 2013; Branagan, 2011).
Despite the recognized value of a fine arts education in a labor market that increasingly prioritizes creativity for economic growth, graduates face significant challenges such as low wages and limited job opportunities (Steiner & Schneider, 2013) Research by Daly et al (2011) indicates that, from a financial perspective, investing in a fine arts education is often not a sound decision, noting that completing a Bachelor’s degree is generally a wise investment, with the notable exception of visual and performing arts.
Despite fine arts graduates facing lower post-graduation returns compared to other tertiary-qualified individuals, these programs continue to be a highly appealing choice in Australia's higher education landscape.
In Australia, the number of students commencing fine arts programs rose by 5.2 percent from 2012 to 2013, with 25,763 individuals applying to creative arts programs that year This trend indicates a strong desire among aspiring artists to pursue fine arts education, even amidst a challenging economic landscape (Department of Education and Training, 2014).
From an economic standpoint, pursuing a fine arts education appears illogical, raising questions about the rationale behind such choices As noted by Abbing (2002), the decision to study fine arts is perplexing, particularly when the financial returns are often considered subpar This leads to the central inquiry of this discussion: why do individuals opt for fine arts despite the modest economic benefits?
Objective and Focus of the Study
While many romantically believe that "love does it all" in intimate relationships, financial issues can significantly impact the love that once thrived Similarly, the bond between an artist and their creative practice is affected by money Talent alone is often not enough to build a successful career in the arts, as poverty can distract artists, undermining their discipline, focus, and energy, and ultimately hindering their ability to pursue their passion.
Fine arts education lacks a direct employment pathway compared to vocational courses like accounting or engineering This research aims to deliver a risk-adjusted ex ante return analysis of fine arts education, offering valuable career guidance for current and former students, as well as for prospective students contemplating this field.
When evaluating the returns on education as an investment, it is essential to consider both ex post and ex ante perspectives Ex post refers to the actual returns experienced after the investment, while ex ante pertains to the expected returns before making the decision For example, individuals should assess the costs and benefits of pursuing higher education based on available evidence before deciding to advance to the next level.
An ex ante evaluation is an ongoing process that utilizes the experiences and conditions of fine arts graduates to continuously monitor and assess the current fine arts curriculum, rather than merely capturing a moment in time.
A risk-adjusted return measures profitability based on the level of risk associated with an investment This thesis examines the concept of risk-adjusted returns without modifying the collected data, focusing on how expected returns should be adjusted for various risks that influence their outcomes By understanding risk-adjusted returns conceptually, individuals making decisions about higher education can evaluate potential gains while considering the associated risks, ultimately maximizing their investment returns.
This research employs a retrospective approach to chart the professional lifecycle of fine arts graduates residing in and around Melbourne, Australia It focuses on individuals who have obtained a Bachelor’s degree or higher in fine arts since the 1960s, with primary data sourced from the researcher’s own findings.
The online survey instrument, detailed in Chapter 3, collected both quantitative and qualitative data simultaneously, utilizing closed and open-ended questions to explore interconnected themes Key areas of focus include the motivations for pursuing fine arts, the graduates' current income and employment status, and the challenges faced in their artistic careers post-graduation Notably, the survey captures the participants' perspectives before starting their studies and examines the human capital they developed during their education, as well as its practical value in terms of employment and living conditions.
The survey achieved a total of 270 usable responses, reflecting a commendable success given the restrictions on accessing various university alumni databases due to privacy issues Consequently, each respondent was individually sourced through the researcher's personal network, with some participants identified through 'chain' sampling to expand the pool of potential participants.
The sample predominantly consists of females (65%) and individuals born in Australia (82%), aligning with previous findings by Throsby & Zednik (2010), which reported 63% and 78%, respectively Their study offers extensive insights into the economic conditions of professional artists in Australia, serving as a valuable benchmark for comparison with the results presented in this thesis.
The respondents in the sample are aged between 21 and 67 years, with a mean age of 38 and a median age of 37 Most participants graduated from Australian institutions, particularly RMIT University and the Victorian College of the Arts (VCA), while others hail from various institutions across Australia and internationally, including Romania, the United States, and the United Kingdom.
Alongside the online survey, a case study was performed with a graduate who exemplified the core objective of this thesis: to investigate if fine arts graduates possess sufficient general usage (flexible) human capital to succeed in various industries and occupations beyond their fine arts practice.
Research Questions
A literature review led to the formulation of three key research questions regarding the decision-making process of enrolling in fine arts courses and the professional value of the human capital gained The specific questions are: 1) Are fine arts graduates making informed decisions before enrolling in their courses? 2) Do they accumulate more general human capital compared to specific skills? 3) Does the general human capital they acquire enable them to pursue various occupations and sectors?
Conceptual Framework
A conceptual framework serves as an analytical tool that integrates concepts, assumptions, and expectations from various theories to elucidate the relationships among key study elements (Miles & Huberman, 1994; Imenda, 2014) According to Maxwell (2005), it fulfills two primary purposes: first, it contextualizes the research within existing theories and studies, and second, it highlights the research's contribution to the academic field.
This study's conceptual framework is built around three key components: the application of Human Capital Theory and the reasoning for its selection, the consideration of uncertainty in educational investment decisions, and the characteristics of human capital that highlight the benefits of accumulating general-use human capital amidst uncertainty in educational investments.
1.5.1 Human Capital Theory and the Rise of the Knowledge-Based Economy
Many economists regard human capital as an invaluable, inexhaustible resource that drives long-term economic growth in modern economies As noted by Marshall (1920), "The most valuable of all capital is that invested in human beings." This perspective emphasizes that accumulating high levels of human capital is essential for success in today's knowledge-driven economy.
Investing in workers' skills enhances individual employment prospects and leads to higher wages This investment also benefits society by increasing human capital, resulting in greater tax revenue, improved health outcomes, more engaged political participation, and reduced social transfer payments (Piketty, 2014).
Educational qualifications serve as a significant indicator of an individual's abilities to potential employers, rooted in Human Capital Theory This theory posits that higher education is associated with the acquisition of advanced skills that are beneficial in professional settings Additionally, it emphasizes the critical role of decision-making in selecting a field of study, highlighting the importance of informed choices in shaping one's career trajectory.
The literature on educational outcomes provides decision makers with essential tools for evaluating potential educational investments, often relying on historical data to inform ex ante return analyses For instance, if 5 out of 100 students fail their chemistry class, the projected risk is 5 percent, and a dental student may anticipate an initial salary of $80,000 based on average earnings of recent graduates However, this basic predictive modeling can lead to significant discrepancies between expected and actual returns due to inherent future uncertainties, which are a fundamental aspect of the study's conceptual framework.
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:
We inhabit a rapidly changing and uncertain world, where our understanding of the future is crucial for navigating life's challenges This uncertainty is prevalent in business and other areas, as we often act based on opinions that may have varying degrees of validity Ultimately, we operate with partial knowledge rather than complete ignorance or perfect information.
Investing in education is a long-term commitment that can face various unexpected challenges on the path to graduation and beyond As the knowledge-based economy evolves rapidly, the ability to gather sufficient evidence for informed decision-making is increasingly hindered Therefore, relying on the assumption of perfect foresight regarding the future value of a qualification is an unreliable approach to educational investment.
1.5.3 Investing in Human Capital under Uncertainty
Our analysis of ex ante returns is grounded in Human Capital Theory and the uncertainties surrounding educational investment decisions This framework connects the accumulation of human capital gains, which are assessed in two dimensions and hinge on the transferability of acquired skills A key concept in labor economics is the distinction between specific human capital and general usage human capital.
Human capital varies from highly specific to entirely generic skills (Castanias & Helfat, 2001) At one end of this spectrum, individuals acquire specialized skills that hold greater value within a particular occupation, company, or industry compared to other professional contexts.
General human capital is highly valued by employers due to its ease of redeployment across various occupations and sectors It includes a combination of personal, interpersonal, and organizational skills, often linked to emotional intelligence These skills enable workers to effectively communicate, collaborate in teams, maintain a willingness to learn, and leverage technical skills that enhance organizational and commercial opportunities.
Investing in specific human capital can lead to higher productivity compared to general human capital; however, it carries inherent risks These specialized skills are often linked to a specific firm, occupation, or sector, making them less valuable if they become obsolete or if an individual transitions to a different role or company Research by Castanias & Helfat (2001) and Harris & Helfat (1997) indicates that specific human capital significantly depreciates when employees switch firms due to its limited transferability.
A study conducted in 2010 revealed that individuals possessing higher levels of specific human capital tend to transition between similar occupations This finding indicates that the accumulation of specialized skills may limit overall worker mobility.
1.5.4 Importance of Flexibility in Today’s Labor Market
The future of employment remains uncertain, with policymakers and businesses unsure of the nature and location of upcoming jobs, leaving school leavers in a similar predicament In light of this unpredictability and evolving workplace dynamics, it is essential for individuals to cultivate adaptable, resilient, and resourceful skills that enable them to creatively tackle challenges and capitalize on new opportunities.
Investing in general human capital rather than specific skills is advantageous in uncertain educational environments Research by Gervais, Livshits, and Meh (2007) highlights the balance between increased productivity and the flexibility of reallocating human capital While economies with specific human capital tend to be more productive, they are also at greater risk during economic fluctuations due to the challenges in reallocating such skills Therefore, the level of uncertainty faced by workers is a crucial factor in their human capital investment decisions.
The Relevance of Returns to Artistic Practice
This article explores the intersection of economics and fine arts to better understand the 'use value' of a fine arts education While some perceive art and economics as opposing forces, various perspectives exist within each field Court (2015) argues that art should remain separate from monetary influences to preserve its integrity, a view rooted in Romantic ideals Conversely, Van den Bosch (2005) highlights how commerce, institutional gatekeepers, and global market dynamics shape the relationship between artists and society.
Abbing (2002, p.38) expresses discomfort with the intersection of art and economics, stating, "I feel bad when I see my dealer selling my drawings to people who primarily want them to impress other people." He candidly admits that, as an artist, he struggles with the notion that artworks are often bought and sold for substantial amounts of money.
I am uneasy with the fact that art is measured in monetary terms.’
Research by Alper & Wassall (2006) highlights that very few artists in the U.S achieve the level of success necessary for a sustainable career in the arts Similarly, Throsby & Zednik (2010) reveal a bleak economic situation for artists in Australia, noting that their incomes have stagnated compared to other professions More than half of surveyed artists living with a partner rely on that partner's income, underscoring the financial challenges faced by artists In fact, the average income of artists in Australia is lower than that of all occupational groups, including non-professional and blue-collar jobs.
Regardless of whether or not artists feel ‘connected’ with the economic world around them, the connection is unavoidable
Navigating life involves assessing benefits and costs, making decisions that align means with ends, and preparing for an uncertain future, all of which reflects our inherent engagement with an economic framework Understanding economic principles is one of the most valuable areas of knowledge one can possess (Kates, 2014, p.5).
The pursuit of financial stability does not diminish an artist's commitment to their craft Heazlewood (2014, p.89) emphasizes that Australian artists must develop a strong understanding of economics to sustain their practices over time, noting the stark contrast in numbers with one artist for every eight bankers in the country In a capitalist, neoliberal society, it is essential for artists to adapt and coexist within this framework.
Alfred Marshall defined economics as "the study of mankind in the ordinary business of life," highlighting its relevance to understanding human behavior and its societal implications This perspective suggests that economics should not be viewed as intimidating or dull, but rather as a vital field that helps individuals navigate and function effectively within society.
Overview of the Thesis
This thesis comprises six chapters, with Chapter 1 providing a comprehensive overview of the study's background, including the problem statement, conjecture, intent, and focus It outlines the research questions and emphasizes the significance of accounting for uncertainty in the study, while also highlighting the importance of integrating artistic and economic scholarship.
Chapter 2 offers a thorough literature review that highlights the importance of the research area by identifying a research gap It discusses various issues related to educational returns, emphasizing the role of education in the knowledge-based economy and the higher returns experienced by graduates The chapter also examines the differences in returns across various fields of education, explores motivations for enrolling in fine arts programs, and considers Human Capital Theory and Florida’s ‘Creative Class,’ while underscoring the significance of conducting a retrospective study.
The literature review highlights the necessity for additional research into the factors influencing the decision to enroll in fine arts courses in higher education, as well as the subsequent occupational and employment outcomes This investigation is grounded in the principles of modeling educational investment decisions amid uncertainty.
Chapter 3 outlines the foundational principles and rules governing the research methodology, addressing ethical considerations and the approach to primary data collection It details the procedures for data collection and analysis, while justifying the decisions made regarding research design, setting, and participant selection.
Chapter 4 presents the quantitative findings from the online survey, beginning with an overview of the sample's demographic characteristics It then delves into key themes such as educational qualifications—both prior and post—employment status, occupational sectors, total income, and income derived from creative practices Additionally, the chapter explores the participants' initial outlook regarding their likelihood of course completion, expectations for artistic income and practice, and the nature of their human capital accumulation.
Chapter 5 presents qualitative findings, starting with a single case study that demonstrates the applicability of human capital gained from a fine arts course across various occupations and sectors beyond the arts It concludes with insights from two open-ended survey questions, revealing how participants' fine arts education has influenced their careers The chapter includes a mix of positive and negative responses, highlighting that while not all respondents could apply their fine arts training outside the arts, several consistent themes emerged for further analysis.
Chapter 6 concludes the thesis by summarizing the key themes identified in the data and discussing their significance It advocates for the inclusion of artists in sectors beyond the arts, emphasizing the benefits of recognizing the valuable skills and human capital that trained artists bring The chapter argues that various occupational sectors can greatly benefit from embracing these artists, fostering common ground and acceptance of their contributions.
Conclusion
Economics, as a social science, employs a positive scientific approach to quantify and measure concepts that drive behavior and decision-making within constraints Scholars in the field of art and culture recognize the necessity of looking beyond mere price, understanding that it does not always reflect cultural value While quantifiable values provide insights, it is crucial to acknowledge their limitations and the significance of what these numbers do not convey, as this also influences individuals' decisions, including investments in fine arts education.
Literature Review
The Role of Higher Education in the Knowledge Economy
While some individuals choose higher education for personal growth, the primary motivation for most students today is employment opportunities A 2009 study by the Australian Bureau of Statistics revealed that approximately 75% of recent bachelor’s degree graduates cited job-related reasons as their main motivation for pursuing their studies (Norton, 2014).
The Australian economy has shifted significantly, with traditional industries diminishing and a knowledge-based economy becoming more prominent, mirroring trends in developed nations Future job markets are expected to demand higher skill levels, leading to the decline of low-skilled positions Consequently, obtaining a higher education qualification is increasingly seen as a key strategy for achieving stable and rewarding employment.
The increasing demand for skilled workers in the knowledge economy highlights the crucial role of universities in equipping individuals to meet the dynamic and complex requirements of today's job market.
This research explores the professional lifecycle of fine arts graduates in Melbourne to assess the economic value of their skills Guetzkow (2002) emphasizes the arts' contributions to both individual and community prosperity Notable examples include the positive impact of arts-integrated curricula on academic performance and discipline (Fiske 1999; Remer, 1990), the revitalization of struggling neighborhoods through economic growth (Costello, 1998; SCDCAC, 2001; Stanziola, 1999; Walesh, 2001), and the enhancement of physical and psychological well-being through arts participation (Baklien, 2000; Ball & Keating, 2002; Bygren, Konlaan & Johansson, 1996; Turner & Senior, 2000) Additionally, the arts foster social capital and help achieve community objectives (Goss, 2000; Matarasso, 1997; Williams).
The ex post Returns to Completing a Higher Education Qualification
Estimating the financial returns to education has a significant history in labor economics, highlighting the importance of higher education not only for students but also for governments due to its implications for future tax revenue and debt repayment Extensive research has been conducted to analyze the income and employment outcomes of individuals with higher education qualifications According to Heckman, Lochner, and Todd (2005), new estimates of the 'rates of return' to schooling are frequently reported, utilizing various instrumental variables and ordinary least squares estimates.
Investing in higher education is a wise decision for individuals, as highlighted by Daly et al (2011) According to the Graduate Skills and National Productivity report from the Group of Eight, which analyzed census data, full-time workers with a Bachelor’s degree earn significantly more than those without tertiary education The report indicates that graduate wages surpass those of school leavers by 75% or more at nearly every age, while vocational training earnings fall in between.
The graduate premium, which highlights the wage difference between individuals with and without qualifications, is a common way to illustrate the returns on higher education; however, it may not be the most effective measure For instance, Norton (2012) found that Australian women with a bachelor's degree earn approximately A$800,000 more over their lifetime than those who did not pursue further education, while men earn an additional A$1.1 million A more informative approach is calculating the private or internal rate of return, as advocated by Daly et al (2011), which considers both the costs and benefits of education This method provides a comprehensive view of the financial benefits by factoring in direct costs like tuition and indirect costs such as the time spent away from the workforce.
Numerous studies in Australia demonstrate the financial benefits of investing in education, as highlighted by Daly et al (2011) Key examples include research by Miller (1982), Maglen (1994), and several others, all of which consistently show a positive monetary incentive for educational investment.
Table 2.1 Private rates of return to a bachelor’s degree for persons in Australia: 1981-2006 (%)
Higher education qualifications significantly enhance employment outcomes, with individuals holding such qualifications enjoying a notable advantage in the labor market In Australia, approximately 86.2% of working-age individuals with post-school qualifications are part of the labor force, compared to only 68.9% of those without Additionally, data from the Australian Bureau of Statistics indicates that among those unemployed for a year or more, the highest percentage (26%) had only a Certificate I/II, while only 13% of those with a bachelor's degree or higher faced long-term unemployment.
Le & Miller (2005) highlighted several reasons why individuals without higher education qualifications face greater challenges in the labor market compared to their more educated counterparts Economic fluctuations tend to impact lower-skilled workers more severely, as higher-skilled employees can easily replace them, while the opposite is not true Additionally, organizations prefer to retain skilled workers due to the higher costs associated with their replacement Lower-skilled workers also exhibit less mobility and often depend on local job opportunities Notably, a quarter of discouraged job seekers cited a lack of necessary schooling, training, skills, or experience as the primary reason for not actively seeking employment (Australian Workforce Productivity Agency, 2012, p.11).
The Impact that the Field of Education has on the Ex post Returns
The financial and occupational benefits of obtaining a higher education degree vary significantly across different fields For instance, mining engineers experience a vastly different rate of return compared to nurses in public hospitals or primary school teachers Norton (2012) emphasized that this variation exists not only between disciplines but also within them, as corporate lawyers typically earn much more than family lawyers An individual's choice of subject at university plays a crucial role in determining their potential earnings, highlighting the need for a nuanced understanding of the financial returns associated with various educational paths (Kelly, O’Connell & Smyth, 2010).
Daly et al (2011) analyzed cross-sectional Census data to examine the variance in financial outcomes in Australia, focusing on median earnings across different higher education fields Their findings indicate a generally positive correlation between educational attainment and earnings, which compares favorably to the long-term real bond rate of 2 to 3 percent However, the study also highlights that not all students experience significant financial benefits from obtaining a qualification.
Men experienced the highest rates of return in fields such as Dentistry, Nursing, Commerce, Law, Economics, and Information Technology, while women saw their highest returns in Dentistry, Medicine, Commerce, Law, Economics, and Information.
According to Daly et al (2011), the visual and performing arts are the only qualifications that exhibit a negative internal rate of return and a negative net present value for both genders They concluded that pursuing a degree in this field is not a sound financial investment, noting that while completing a Bachelor’s degree is generally a wise decision, the visual and performing arts stand as a significant exception (Daly et al., 2011, p.18).
According to Grad Stats (2013), the median starting salary for Art and Design graduates under the age of 25 in their first year is A$40,000, ranking them just above pre-registered pharmacy graduates in terms of earnings.
A study by Beyond Graduation (2013) revealed that three years after completing their degrees, Creative Arts graduates, regardless of gender, had the lowest earnings among all tertiary graduates The authors noted that these graduates consistently received the lowest median salary compared to any other educational field.
In 2007-08, Throsby and Zednik estimated that the median total income for artists was approximately $35,900, with a median creative income of only $7,000, significantly lower than the median incomes of employees in other professions.
$43,300 for all employees, $61,700 for professionals and $77,500 for managers
Despite the overall increase in real incomes across the workforce, artists have not benefited from this trend According to Throsby and Zednik, the creative income for artists remained unchanged from 2000-01 to 2007-08, while the general workforce experienced a real income growth of approximately 16 percent during the same period.
According to Grad Stats (2013), a report on the employment outcomes of graduates revealed that fields such as medicine (96.9%), pharmacy (97.6%), mining engineering (96%), surveying (86.5%), electrical engineering (86%), and civil engineering (85.4%) had high employment rates shortly after graduation In contrast, graduates from life sciences, social sciences, languages, psychology, humanities, architecture, physical sciences, and chemistry were more likely to be seeking employment during the same timeframe.
According to Grad Stats (2013), fine arts graduates consistently ranked the lowest across various employment indicators They had the lowest full-time employment rate at 48.3%, the highest percentage of graduates seeking full-time work while not employed at 19.3%, and the highest percentage of those looking for full-time positions while working casually at 32.5% Overall, 51.7% of fine arts graduates were actively seeking full-time employment.
Despite the lackluster financial and employment outcomes associated with fine arts degrees, enrollment in these programs continues to thrive Notably, there was a 5.2 percent increase in the number of new fine arts students in Australia from 2012 to 2013, as reported by the Department of Education and Training in 2014.
In 2013, the Department of Education and Training reported significant increases in the number of commencing students across various fields of education compared to 2012 Notable growth was observed in Mixed Field Programs (up 14.0%), Engineering and Related Technologies (up 10.5%), and Information Technology (up 8.3%) Other fields also saw increases, including Health (up 7.6%), Management and Commerce (up 5.7%), Society and Culture (up 4.7%), and Natural and Physical Sciences (up 4.3%) Additionally, Agriculture, Environmental and Related Studies rose by 2.6%, Education by 2.5%, Architecture and Building by 1.3%, and Non-award courses by 0.6%.
Despite strong enrollment numbers in fine arts programs, the post-enrollment indicators seem to have little relevance in grasping the allure of a fine arts education This contrasts with earlier findings that indicate the primary motivation for most individuals pursuing higher education is employment opportunities.
The Fine Arts Choice
Enrolling in a fine arts course can be influenced by various factors, as economic principles suggest that incentives shape behavior and decision-making, ultimately affecting economic outcomes Frey (2012) introduced the concept of Homo economicus, which posits that individuals act rationally and in their self-interest to maximize utility This rational maximizer framework has been applied across diverse fields, yielding testable predictions regarding responses to price changes However, Frey (2012) critiques this theory for its oversimplification, arguing that it fails to capture the complexity of human motivations, particularly those related to artistic creation.
Deciding to pursue a fine arts course in higher education is influenced by various complex factors This article examines key motivations identified in the literature that drive individuals to enroll in fine arts programs.
2.4.1 Art’s High Status and the Formation of Cultural Capital
Art is often perceived as both pleasurable and noble, with Pinker (1997) noting that in certain social circles, admitting ignorance of renowned writers or favoring popular music over classical can be as shocking as an impolite gesture This association of art with elevated social status and virtue aligns with Bell’s (1947) concept of ‘sartorial morality,’ suggesting that individuals derive respectability from symbols of a life distanced from mundane necessities.
Abbing (2002) argues that the esteemed status of art significantly motivates individuals to pursue higher education in this field, drawing a parallel between the pursuit of fine arts and the calling of the clergy Just as many grapple with understanding their spiritual calling, aspiring artists face similar uncertainties in their career paths Notably, Abbing (2002) highlights that, despite the financial challenges faced by artists—who earn less than other similarly trained professions, with the exception of clergy—they often receive more support through gifts and donations.
Bourdieu’s (1986) concept of cultural capital sheds light on the motivations behind individuals choosing fine arts courses in higher education, as it emphasizes the human desire for social connection and acceptance His theory expands the notion of capital beyond economic factors to include cultural elements, such as skills, tastes, and social attributes, which individuals accumulate throughout their lives These symbolic elements enable people to access and integrate into specific social classes, fostering a sense of collective identity and belonging Ultimately, individuals are drawn to environments where they can relate to and engage with others who share similar experiences and interests.
Bourdieu’s concept elucidates the formation of our identities and provides insight into why certain individuals are drawn to pursue fine arts in higher education, particularly considering the elevated status of art.
According to Bourdieu’s theory, Di Maggio and Mukhtar (2004) highlight that specific groups possess parochial forms of knowledge deemed prestigious, yet these forms are often relevant only within limited circles, such as medicine or computer science In contrast, they emphasize that the arts, particularly high arts, are integral to Bourdieu’s concept of cultural capital, as they have been institutionalized by states and higher education institutions This institutionalization makes the arts a widely recognized indicator of cultural capital, evident in their presence in museums and offices.
The elevated status of fine arts makes it an appealing field of education, despite less favorable outcomes after graduation Abbing (2002) emphasizes the need to protect this status for fine arts courses to remain attractive in higher education He suggests that those pursuing fine arts should share a disdain for prioritizing monetary gain in this revered medium This reflects the ongoing tension in the art world, where artists often reject the notion of creating for profit, as noted by Frey (2012) Instead, they are encouraged to serve art rather than financial interests to maintain its prestige and allure.
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
Incentives extend beyond monetary rewards, as highlighted by Cowen (2008), who noted that while money may have influenced historical betrayals and corruption, it is not always the most effective motivator In some situations, excessive use of monetary incentives can backfire, leading individuals to feel controlled and resentful This underscores the intricate nature of human motivation, which is driven by a blend of both external and internal factors.
Incentives aimed at boosting productivity, such as bribery, can negatively impact creative individuals According to Amabile (1983, p.120), while external rewards may lead to increased effort and output, the quality of work often declines, resulting in more errors and less creativity compared to those not rewarded This phenomenon, known as moral hazard, occurs when one party engages in risky behavior while being shielded from the consequences, leaving the other party to bear the costs For instance, an artist accepting a commission may compromise the quality of their work for financial gain, rather than pursuing pure artistic expression, as the predetermined remuneration reduces their motivation to push creative boundaries.
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 inherent subjectivity and lack of rigor in the study, the findings aligned with expectations (Torr, 2008).
Throsby (2011) posits that genuine artists will create art regardless of their financial situation, as their artistic nature enables them to transcend economic challenges To support this assertion, Throsby references a lecture by John Ruskin (1857) delivered in Manchester.
A true artist will create exceptional work with minimal resources, such as just bread, water, and salt, while a mediocre painter will produce poor quality art even in luxurious conditions, like living in a palace with a princely income.
I express this not out of disdain for the esteemed painter, but out of respect for his artistry I believe that enhancing his wealth would not contribute to his dignity or joy, just as it would not for Shakespeare.
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 the challenges they face in the labor market will be offset by greater job satisfaction derived from non-monetary rewards (Abbing, 2002) Menger (1999, p.555, quoted in Steiner & Schneider) highlights that artistic work is appealing due to various measurable dimensions of job satisfaction, such as work variety, personal autonomy, opportunities for self-actualization, a unique lifestyle, a sense of community, minimal routine, and significant social recognition for successful artists.
The Uncertainty of the Educational Investment
Evaluating the financial advantages of obtaining a higher education qualification can be effectively illustrated by examining the current income levels of individuals with specific qualifications, as highlighted in cross-sectional data (Daly et al., 2011) However, it is important to consider the often-overlooked risk associated with educational investments (Altonji, 1993).
The analysis of this study emphasizes the importance of accounting for uncertainty in educational investments, as many assumptions are necessary to present ex post figures as the expected income for individuals starting their qualifications This uncertainty significantly influences the decision-making process, especially since such decisions are often made at a young age when individuals have limited understanding of labor market conditions As noted by Groot & Oosterbeek (1992), teenagers lacking labor market experience likely possess minimal knowledge about employment opportunities and the potential returns on their educational investments.
Hussey & Swinton (2011) approached the decision to invest in a college education as a risky investment, highlighting the uncertainties surrounding graduation success They noted that prospective students often lack adequate knowledge about the educational content and its value, leading to shifts in interests from age eighteen to twenty-one Additionally, the challenges of coursework may result in higher dropout rates Graduation probabilities vary by institution, with more selective schools typically achieving better rates Factors such as parental income, commitment to the institution, and access to financial aid also significantly influence graduation likelihood (Horn, Kojaku & Carroll, 2001).
Investing in education involves considerable uncertainty due to the significant time lag between making the investment and realizing returns This decision relies on long-term expectations regarding future wages, job availability, economic cycles, employment rates, taxation, political factors, and personal circumstances, all of which can fluctuate dramatically.
Prospective fine arts students face significant uncertainty regarding their career paths Alper & Wassall (2006) highlight that, despite sixty years of documented challenges, the labor market disadvantages of pursuing a career in the arts are often overlooked by aspiring artists.
In 2002, Abbing highlighted that information regarding careers in the arts is often incomplete, leading to greater uncertainty for aspiring artists compared to other professions He observed that most young individuals possess only a vague understanding of what a career in the arts entails, including the competitive landscape of galleries and the significance of talent and personal abilities Furthermore, he argued that if these aspiring artists had a clearer understanding of these factors, it is unlikely they would misjudge their chances, resulting in fewer individuals opting for fine arts courses.
Because of uncertainty an ex ante analysis may differ considerably from the ex post returns Heckman, Lochner, & Todd
Research by (2005) highlights significant disparities between the anticipated (ex ante) and actual (ex post) returns on education in the USA Similarly, a study by Daly, Fleming, and Lewis (2006) reveals that individuals who began their higher education in Australia in 1986 experienced greater ex post returns than initially expected, as the value of skills increased throughout the 1990s in Australia.
As Kates (2014) noted, change in the economy is continuous, with some transformations being visible while others remain hidden or unknown, yet they ultimately impact everyone This uncertainty in educational investment, set against a backdrop of a dynamic economic environment and an unpredictable future, highlights the potential misleading nature of ex post statistics regarding the returns on higher education qualifications, necessitating careful interpretation.
Human Capital Theory
Human Capital Theory is a pivotal concept in understanding graduate premiums, originating from Adam Smith's foundational ideas in "The Wealth of Nations" (1776) This influential economic theory highlights the value of education and skills as forms of capital Fisher (1906) expanded on this by establishing a comprehensive framework for capital that includes human capital, while Mincer (1958) was the first to formally introduce the term.
‘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 described as the productive wealth represented by labor, skills, and knowledge (OECD, 2001) It encompasses both inherent and acquired traits or knowledge within an individual that enhance their overall productivity (Garibaldi, 2006).
Human Capital Theory, rooted in neoclassical economics, posits that individuals invest in education primarily to enhance their future economic returns rather than for immediate enjoyment or enlightenment (Blaug, 1992; Tan, 2014) According to Tan (2014), as referenced by Marginson (1989, 1993), this theory suggests that acquiring knowledge and skills through education boosts workplace productivity, leading to higher salaries, as wages are ideally determined by individual productivity Consequently, individuals will continue to invest in education until the benefits outweigh the private costs, indicating a positive correlation between education and earnings.
The term "human capital" has faced criticism from liberal academics due to its negative implications, likening it to slavery, as highlighted by Blaug (1992) He referenced J.S Mill, who argued that humans should not be classified as wealth, emphasizing that they are the purpose for which wealth exists Additionally, Tan (2014) noted that Schultz (1959) dismissed the critiques of Human Capital Theory from liberals, labeling them as sentimentalists.
Human capital is inherently tied to its original owner and cannot be transferred Its utilization and development are influenced by human relationships, which often involve various agency-related issues (Burton-Jones & Spender, 2011) For instance, Williamson’s ‘hold-up’ problem (1985) arises from the relationship-specific nature of expected performance, which is contingent on the motivations of human capital owners within an economic context This situation creates potential risks for both parties involved in a transaction A notable example is when a firm invests in the specific human capital of an employee, who may leave and take that investment with them.
This research investigates the nature of human capital acquired by fine arts graduates and its practical value in an unpredictable job market Becker (1964) distinguished between 'general' human capital, which is universally valued by employers, and 'firm-specific' human capital, which holds value only within a particular organization The study aims to determine the type and extent of human capital that fine arts graduates possess According to Tang & Wang (2012), higher levels of general human capital offer greater flexibility, enabling employees to transition more easily between different occupations and industries.
Investing in uncertainty involves analyzing the varying levels of human capital accumulated by fine arts graduates, which helps in forming a clearer risk-adjusted outlook.
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 unpredictable landscape of the knowledge economy, nurturing creativity is essential for preparing young people for success As Furlong emphasizes, effective preparation goes beyond mere technical skills; it requires the development of a diverse range of creative abilities Thriving in this complex environment necessitates the capacity to leverage a comprehensive set of creative faculties.
Australia's expanding professional and educated workforce is part of Florida's (2002) 'Creative Class,' a socio-economic group that utilizes creativity and diverse knowledge to address challenges The core thesis of the 'Creative Class' posits that as economies shift from agriculture and heavy industry to knowledge-based frameworks, the significance of creativity in the economy increases, leading to a rise in the market value of creative individuals.
Traditional economic resources such as land, labor, and capital are finite, whereas human creativity and ingenuity, represented by human capital, are boundless global resources These resources can be easily reproduced and challenge the law of diminishing returns The potential of leveraging creativity for economic growth has sparked significant academic interest since Florida's 2002 publication Glaeser (2004) noted that "creativity is to the 21st century what the ability to push a plow was to the 18th century."
The Australian Education Review by Wyn (2009) emphasizes the critical need for creativity in problem-solving as essential for understanding the complexities of the 21st century Supporting this view, the 2010 IBM Global CEO Study reveals that CEOs prioritize creativity above other key attributes such as rigor, management discipline, global thinking, integrity, and vision, highlighting its importance for successfully navigating today's intricate landscape.
In his concept of the 'Creative Class,' Florida (2002) identifies the 'super-creative core' as comprising a diverse group of individuals, including scientists, engineers, university professors, poets, novelists, artists, entertainers, actors, designers, and architects.
In modern society, "thought leadership" is exemplified by nonfiction writers, editors, cultural figures, and researchers who drive innovation and creativity This influential group generates versatile ideas and designs, such as widely applicable products, strategic theories, and music compositions that can be repeatedly performed Their contributions are essential for fostering progress and enhancing cultural discourse.
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 prominently represented by fine arts graduates In September 2008, Nesta published a report titled "The Art of " which highlights the significance of this group.
Fine arts graduates play a significant role in enhancing the UK economy, as highlighted by a survey of over 500 alumni from the University of Arts, London Their diverse skill set, which includes creativity, teamwork, and independent learning, is essential for generating new knowledge that transcends their artistic endeavors According to findings shared on Nesta’s website, the increasing importance of these transferable skills underscores their contribution to knowledge-intensive sectors within the economy.
Fine arts graduates play a crucial role in innovation due to their preference for interpretive work methods, which embrace ambiguity and uncertainty Oakley et al (2008) highlight that while analytical approaches can reduce uncertainty, it is this very ambiguity that fosters the emergence of new ideas, as noted by Lester & Piore (2004) They argue that the ability to tolerate ambiguity is essential for innovation, reinforcing the significance of fine arts graduates in this process Oakley et al (2008) further emphasize that narrowing conversations too early can stifle potential innovations, underscoring the importance of maintaining an open dialogue to explore creative possibilities.
Creativity is a complex concept that is frequently misunderstood and has various interpretations It encompasses more than just the ability to create something new Throughout history, numerous definitions of creativity have been proposed, challenged, and revised, yet a universally accepted definition remains elusive Despite ongoing efforts to clarify its meaning, the essence of creativity continues to be a mystery.
Creativity is an ambiguous concept, much like the socio-economic classifications in Florida According to Peck (2005), the idea of the 'Creative Class' is merely a neo-liberal strategy akin to providing 'biscotti and circuses.' Additionally, determining who qualifies as an artist presents its own challenges.
Defining creativity and identifying members of Florida's 'Creative Class' can be challenging However, individuals with a fine arts degree, regardless of their profession—be it sculptor, photographer, retail manager, accountant, or bartender—may serve as catalysts for economic growth Fine arts graduates provide a solid foundation for examining the connection between developed creative skills, the knowledge they generate, and employment opportunities in the knowledge-based economy.
The Multigenerational, Retrospective Nature of the Study
The career advancement of higher education graduates often experiences delays post-graduation, as highlighted by Purcell et al (2005) It may take several years for graduates to reap the full benefits of their education, emphasizing the need for a comprehensive, multigenerational study to track the long-term career progression of these individuals.
Research indicates that the improvement in labor market conditions for UK graduates three to four years post-university can be gradual (Purcell et al., 2005) Supporting this view, studies from Coates & Edwards (2008) highlight similar findings in Canada (Finnie, 2000, 2004), Europe (Allen & van der Valdan, 2008; Little, 2008), and the USA (Bradburn, Nevil & Forrest Cataldi, 2006), confirming that university graduates ultimately secure favorable positions in the labor market (Coates & Edwards, 2008).
Conclusion
This literature review outlines the key themes of the thesis and sets the stage for the research conducted in this study It establishes a conceptual framework for a risk-adjusted ex ante return analysis The research investigates the factors influencing the decision to pursue higher education, the uncertainties associated with this investment, the human capital gained during the degree, and its practical value in terms of employment and living standards.