Australian students have turned away from university degrees in favour of trades and vocational courses, the latest census data has revealed.

In 2021, 177,032 more students were completing vocational studies, which included courses offered by TAFE and private training providers, compared to 2016. In that same time period, there were just 24,824 more people studying at university.

Vocational students made up 7.8 per cent of all Australian students in 2021, up from 5.9 per cent in 2016 and 7.3 per cent in 2011.

Meanwhile, universities enrolled 15.4 per cent of students in 2021, compared to 16 per cent in 2016 and 14 per cent in 2011.

The census data also showed that vocational students are getting older, with 63 per cent aged 25 and older in 2021 compared to 57 per cent in 2016.

Women were far more likely to be enrolled at university than men, making up 58 per cent of students, compared to 56 per cent in 2016.

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At a national level, the question is: what is the link between education and growth?

That is a question the Productivity Commission is grappling with in the context of our 5-year Productivity Review. It’s not simple and to show why I want to start two claims: one bland and one more controversial.

The bland one is that education is fundamental to equipping people for the high skill jobs of a modern economy. (Among its many other benefits.) The controversial one centres on our prospects for future growth and it is this: it is not clear that high levels of education are making us any more innovative. Because the glaring paradox of our age is that we have never been more highly educated and we have the lowest productivity growth in 50 years.

How can this be, and what should we do about it? I think the challenge that it poses is that education and research, like most good things, have a tendency towards diminishing returns. The policy question is how we might break out of that tendency.

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