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Socioeconomic status and the allocation of government resources in Australia: How well do geographic measures perform?

Patrick Lim (National Centre for Vocational Education Research, Adelaide, Australia)
Sinan Gemici (National Centre for Vocational Education Research, Adelaide, Australia)
John Rice (National Centre for Vocational Education Research, Adelaide, Australia)
Tom Karmel (National Centre for Vocational Education Research, Adelaide, Australia)

Education + Training

ISSN: 0040-0912

Article publication date: 13 September 2011

Abstract

Purpose

The aim of this paper is to compare the performance of area‐based vs individual‐level measures of socioeconomic status (SES).

Design/methodology/approach

Using data from the longitudinal surveys of Australian youth (LSAY), a multidimensional measure of individual SES is created. This individual measure is used to benchmark the relative usefulness of socio‐economic indexes for areas (SEIFA), a geographic set of measures often used in Australia to assess the SES of individuals. Both measures are compared in terms of classification bias. The effects of using the different SES measures on participation in post‐compulsory education are examined.

Findings

SEIFA measures perform satisfactorily with regard to the aggregate measurement of SES. However, they perform poorly when their use is aimed at channelling resources toward disadvantaged individuals. It is at the individual level that the analysis reveals the shortcomings of area‐based SES measures.

Research limitations/implications

While region based measures are relatively easy to collect and utilise, we suggest that they hide significant SES heterogeneity within regional districts. Hence, the misclassification resulting from the use of regional measures to direct support for low SES groups creates a risk for resource misallocations.

Originality/value

The finding that region‐based measures are subject to significant misclassification has important research and policy implications. Given the increasing availability of individual‐level administrative data, the paper suggests that such data be used as a substitute for geographic SES measures in categorising the SES of individuals.

Keywords

Citation

Lim, P., Gemici, S., Rice, J. and Karmel, T. (2011), "Socioeconomic status and the allocation of government resources in Australia: How well do geographic measures perform?", Education + Training, Vol. 53 No. 7, pp. 570-586. https://doi.org/10.1108/00400911111171977

Publisher

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Emerald Group Publishing Limited

Copyright © 2011, Emerald Group Publishing Limited