You are on page 1of 29

Emploring Correlation between Education Level, Income Level and Job Satisfaction in Gippsland

Jing LIN Chen GAO Ruth ZHUANG Nichole CHEN

Contents
Abstract .................................................................................................. 3 1. Introduction ..................................................................................... 4 2. Previous findings.............................................................................. 5 3. Data source and independent variables .......................................... 7 3.1. Data source................................................................................. 7 3.2. Independent variables ............................................................... 8 4. The Empirical Specification .......................................................... 11 4.1 4.2 4.3 Education difference and Income ........................................... 12 Age, Work Experience and Income ........................................ 16 Job Satisfaction ........................................................................ 19

5. Limitations ..................................................................................... 19 6. Conclusions .................................................................................... 21 7. Recommendations .......................................................................... 22 Appendix A........................................................................................... 23 Bibliography ......................................................................................... 29

to attract young professionals to work in regional areas. It is recommended that an increased and unbiased sample should be employed to further help justify the correlation between income level and education level. The purpose of the survey was to find out whether tertiary education could lead to higher income and job satisfaction. are moving to big cities to seek employment. who would otherwise choose farming. Conclusion is drawn that positive correlation exists between education level and income level for both agribusiness sector and farming sector. Information such as the interviewees’ characteristics and income level and job satisfaction is gathered by this survey. the correlation of 3% in agribusiness sector is relatively weak comparing to 36 % of farming sectors. such as correlation analysis and chart analysis. These have resulted in shortage of labour in regional areas. especially Gippsland. With a .Abstract Commodities and the sectors that are related to the commodity boom in Australia such as finance and engineering is changing the demographics of the Australian society. was employed on the collected data. 57 surveys were conducted during this period. young people. age and working experience. As more well-paying jobs open up in these sectors. A survey named “AGI & UoM Survey” was conducted during July 2011 in Gippsland to correlate education level with income level and job satisfaction level of people involved in agribusiness. which has caused serious concern to the public. This study is employed to assist regional area. The overall job satisfaction is very high regardless of the interviewees’ education level. Statistic analysis. However.

The study seeks to assist the development of agriculture and highlights the demand of young professionals in Gippsland. regression models could be built to precisely identify the correlation. Key words: Education. Young people of regional areas. now seek to obtain higher education in finance or engineering to get employment in professions that have higher wages. it is imperative to develop a new strategy to attract more labour.larger sample. Therefore. which has caused serious concern to the public. Introduction Lucrative and booming sectors of mining. Income. This study is conducted by Agribusiness Gippsland and only focuses on Gippsland. The improved understanding of income and job satisfaction . There is also evidence of farmers seeking higher education in areas related to agriculture to increase their earning potential. especially young professionals. to regional areas. Job satisfaction 1. not only with education level but also with other variables that would influence income level. it is important to identify the determinants of income growth and pathways to job satisfaction. finance and engineering industries are luring more and more young people to the big cities. In order to attract more young professionals. This has resulted in shortage of labour in regional areas. who otherwise would normally choose farming as a career option. Sustained labour supply is essential to the viability and competitiveness of regional area’s agricultural industries.

Estimation results and correlation analysis are reported in Section 4. details demographic and economic features of the participants. especially the correlation between education level and income in Gippsland is conducted using data gathered in Warragul. Limitations. 2. It was found that investing in human capital through education is likely to have a positive effect on TFP. The positive impact of education . as well as provides sample descriptive statistics. 8 and 9 respectively. Section 2 contains a review of previous research related to correlation between education level and income as well as job satisfaction. In this study. Phillip Island and Inverloch. an examination of the determinants of income and job satisfaction. Previous findings Literature on correlation between education level and income level is extensive and the results have been proved by continuous findings. Section 3 describes the individual variables. A study supported by ABERE examined the determination of total factor productivity (TFP) in the Australian grains industry.determinations will assist both potential and existing workers in Gippsland to better understand their career path and career options. This paper is organised as follows. However. The survey provided in Appendix A. The relationship between education level and TFP could be treated as a supplementary indicator for correlation between educational level and income level. conclusions and recommendations are presented in Section 7. literature on this correlation of agriculture sector is relatively scarce.

However. Bender). His research was based on the General Social Surveys (GSSs). which led to an overall view of American society’s job satisfaction. Tom Smith from the University of Chicago suggested that Job satisfaction was higher among those with more education (Simth. 2007). or faster adoptions of productivity enhancing innovations by more educated farmers (Shiji Zhao.A. Other findings related to this correlation are demonstrated by major reports from the US. different institutions showed different result based on the surveys they used. A study by US Census Bureau suggested that.E. The more educated had higher expectations for the pecuniary and non-pecuniary returns from their jobs.on productivity could be associated with a number of factors. and has been consistently demonstrated by government surveys (the US Census Bureau. and so were more easily disappointed and dissatisfied (Clark. 1996). On the contrary. The usual explanation relied on expectations. including better resource allocation. It is interesting to note that this relationship between education and earnings potential has been known since the 1970's. people with a higher level of education made more money than those with less education. The correlation between education level and job satisfaction in general has been proved by various institutions. Correlations between education level and income level/job satisfaction level of the whole Australia area and of other fields/other countries have been widely identified . 2009). better business risk management strategies. Keith Bender and John Heywood from the University of Wisconsin-Milwaukee focused on higher educated group by using survey of doctorate recipients (SDR) and found out that additional education resulted in lower job satisfaction (Keith A. 2002).

1. agripolitics. This survey has a broader horizon than other surveys investigating agriculture feature. university higher degree and others. 3. TAFE. TAFE certificate. university degree. Another 78% of farmers were got in touch through phone interview. university degree and university higher degree for further analysis. . Education level is classified in the categories of year 10. which intended cover all the education level can be achieved in Australia. we have grouped the education level into year 10-12. It not only covers farmers from dairy.by previous findings. This section provides brief explanations of data sources and independent variables and discussions of summary statistics. Data source The surveys we have gathered at this stage comprise of 57 members. All the Agribusiness employees and 22% of the farmers we interviewed are either employees of Department of Primary Industries (DPI) and/or the attendants of ABARES regional outlook conference and Victorian Agribusiness Summit. TAFE diploma/advances diploma. agricultural R&D. trade apprenticeship. 34 of whom are from Agribusiness employees and the other 23 people are from farmers. cropping. Due to the small sample size. Data source and independent variables Detailed demographic and economic features of the participants can be collected by AGI & UoM Survey (Appendix A). year 12. 3. beef and mixed farms but also individuals involved in agribusiness. This correlation of Gippsland in farming sector will be detailed stated in later sections. year 11.

age.2. The . which may determine individuals’ income level and job satisfaction in a long run. “Taxable income” is employed in this survey instead of “net income” or “gross income” to avoid the incomparability derived from different tax rate and interest payment. off-farm income Job satisfaction :variables are primary reason for entering agribusiness sector. The income and job satisfaction can be highly related to individuals’ age and working experience. formal education. business type. As these two factors change over time. if this survey is conducted yearly. current job satisfaction level All the variables included in Individuals’ characteristics are assumed to have the potential to influence the income level and job satisfaction. The other individuals’ characteristics stay the same in a short term. a clear trending of income and job satisfaction at an individual level can be found out. Surveys with incomplete information were excluded from this analysis.The information collected in this study was collected during period from Jun 2010 to Jun 2011. 3. and sources of information   Income level: Variables are. Except when analysing the correlation between age and other factors. On-going Education. Independent variables Independent variables were grouped into three categories:  Individuals’ characteristics: Variables are individual’s gender. currentl taxable income. working experience. all the valid surveys were included. Ideally only individuals who are younger than 45 years old should be included in our study. financial expectation. the role in work.

About the income level. It is followed by mix farming. The job satisfaction sector consists of motivation to work in Gippsland. Almost 80% of them have a bachelor degree and the other 20% have either the master degree or a doctor degree. which could on the whole reflect individual’s job satisfaction level. 21.4 years old and the average working experience is 10. The survey data indicated the average age is 34. 000 to $80. In the sample. .5%). cropping/other farming and beef.3% of the people’s income is less than $40. For the farming sector. dairy industry absorbs the most labour.000 in the current year and another one third earned $60. This figure is high. which is 28.000. 000 to $60.1% is generated from off-farm.000 and only 5. Based on the total 57 surveys. 21. as the income data is more reliable and comparable if only on-farm income is counted for farmers and only off-farm income is counted for agribusiness sector.1% are farm owner and 14% are agribusiness manager.1% of the whole surveyed sample.6% are agribusiness employee. one third of the surveyed people earned $40. 26. job satisfaction at the current moment and expectation for the future.000. newspapers and magazines and department of primary industries are the main channel of information. Among them. internet.8% in agripolitics. The operator/employee is the least group (3. Table A below shows the means or percentage of the variables in each sector. 28% of the people can earn more than $80.3% of surveyed people work in agribusiness. mainly due to the containing of a majority of agribusiness workers in this sample. agriculture consultants.5 years.percentage of off-farm income is included. More than two thirds of people in the sample are highly educated. Of the total taxable income.1% in agricultural R&D and 1. 45. average 57.

5% 28.4 Working experience 10.1% 7.8% 21.3% 21.3% . A majority of people have a positive prospect for the future and a high job satisfaction is demonstrated by a scale of 8 out of 10.1% of them inherit the family business.6% 15. The other 33.Nearly half of the surveyed people got into agribusiness sector because of primary career choice and 21.0% 8.8% 3.8% 12.3% 52.5 Business type Agribusiness Agricultural R&D Agripolitics Beef Cropping Dairy Mixed farming Other farming The role in work Agribusiness Employee Agribusiness Manager Farm Manager Farm Owner Farm Partner Operator/employee Formal education TAFE University University higher Year10-12 Source of Information 26.5% 19.1% 14.0% 3.8% 1.6% 14.3% switched into agriculture sector due to current employment or experience in previous professional area. Table A Summary Statistics Mean/Percentage Individuals’ characteristics Age 34.5% 45.0% 3.1% 1.

000.000) Off-farm income Job satisfaction Primary reason for entering agribusiness sector Family business Primary choice Other choice Financial expectation Better off Worse off Similar position Don't know Current job satisfaction level 15.000) ($60.0% 8 4.$100.80% 17% 7. . This is due to the smallness of the sample.8% 3.1% 21.7% 1.000) ($80.$60.40% 5.000.Newspapers and magazines Radio/TV Internet/Online Department of Primary Industries Agricultural consultants Agribusiness retailers/salespeople Other farmers Other Income level Current taxable income ($0.$80.5% 7.000) (>$160.$120. The Empirical Specification Statistic analysis.5% 57.8% 17.000) ($100. was employed in our report. all data collected were used.$140.6% 33.000) ($40.3% 33.000.90% 2.30% 20% 15.000.80% 7.3% 33.000) ($120. which was mention in Section 3.3% 73.3% 3.3% 15.90% 13.1. such as correlation analysis and chart analysis.5% 5. Instead of just analyzing individuals who were younger than 45.000.$40.1% 45.

For people who hold university degree. more than half of the participants in the survey received university degree and each of the other three groups consist of around 15% of the sample equally.4. university degree and university higher degree.1 Education difference and Income 15% 13% 15% 57% Year10-12 TAFE University University Higher Figure 1:Education Classification Source: AGI & UoM Survey Education level was grouped into four major categories: year 10-12. As Figure 1 presents. Basically. TAFE. while 13 people from farming group achieved the same education. agribusiness sector receives higher degree than the farming sector in the sample. . 65% of them majored in either agriculture or science. For instance. 26 people from agribusiness sector received university or university higher degree.

000 dollar have received university or university higher education. as farmers whose income is above 100. Based on the observations showed in Figure 3 and Figure 4. the sample was decomposed into agribusiness sector and farming sector as illustrated by Figure 3 and Figure 4. correlation analysis was built for further study. For farming sector. it is suggested that higher education associates with higher income level. Thus it is assumed that there is no strong potential correlation between income level and education level. This evidence indicates potential positive relation lies between education level and income level. As for agribusiness sector.20 18 16 14 12 10 8 6 4 2 0 Farmer only Agribusiness Whole Sample Figure 2:Taxable Income Source:AGI & UoM Survey Current taxable income is used as the measure of income level.76 % of them have received university degrees or university higher degrees and there is no distinct evidence shows that it is education that results in income difference. To gain a clearer picture about the potential correlation. It is clear in Figure 2 that the taxable income of the sample clusters between 40.000 among the 57 interviewees.000 and 80. For farming . 61. The results correspond to the previous graphs.

however. .sector. the annual taxable income raises as well. indicates that other important factors may exist in explaining the differentiations of income level. The evidence that only 36% was explained by the education factor. With regards to agribusiness sector. One possible factor is farm size. Historically. which is referred by many interviewees as an essential determinant of annual income. the correlation of 3% suggests no significant difference in taxable income regarding to different education level. farms of bigger size usually generate higher income than the relative smaller size farms. the correlation between education level and income level is 36%. This positive correlation figure indicates that as the level of education increases.

Numbers in Sample 14 12 10 8 6 4 2 0 University Higher University TAFE Year10-12 Figure 3: Income Level of Different Education Backgroung in Agribusiness Sector Source:AGI & UoM Survey 8 Numbers in sample 7 6 5 4 3 2 1 0 TAFE Year10-12 University Higher University Figure 4: Income Level of Different Education Backgroung in Farming Sector Source:AGI & UoM Survey .

in terms of years. More than 83% of the farmers surveyed have tried an occupation other than farming. can be explained by a simple reason.2 Age. there is a positive correlation (30%) between work experience and income. According to Figure 5 and Figure 6. When compared to the correlation of 3%.5 years respectively. In our sample. More than one-third of the employees of the agribusiness sector have never worked in a different profession. such as age and work experience. . Work Experience and Income Factors besides education that could affect the income level.9 years old. of the two groups concerned.6 years and 8. between education and income. on the hand. Farmers. there is a negative correlation (-5%) between age and income for the Agribusiness sector. it could be concluded that work experience is the most important factor that determines the income level of an employee in Agribusiness sector. for a farmer and an employee of an agribusiness sector is 13. The discrepancy in the work experience. An average work experience. the average age of a farmer is 35 years old whereas the average age of an employee in the Agribusiness sector is 33. tend to try different professions before settling in on farming. whereas. were also studied during the survey analysis.4.

000 0 0 10 20 30 Age 40 50 60 Figure 5: Income and Age in Agribusiness Sector Source: AGI & UoM Survey 160.000 40.000 Income 80. the correlation between age and income is 29 %.000 0 0 5 10 15 20 25 30 35 Income Work Experience Figure 6: Income and Work Experience in Agribusiness Sector Source:AGI & UoM Survey For the farmers.000 100.000 60.000 140. the correlation between education and income is 36%. As mentioned above. which is greater than the correlation of age and income.000 120.120.000 40.the correlation between work experience and income is only 4%.000 60.000 20. A conclusion could be drawn based on the above comparison that positive relationship does exist between education and income level among farmers and is stronger than any other factors that have been taken into account in the survey.000 80.000 20. whereas.000 100. .

000 20.000 0 0 10 20 30 Work Experience 40 50 60 Income Figure 8: Income and Age in Agribusiness Sector Source: AGI & UoM Survey .000 120.000 20.000 160.000 60.000 120.000 40.000 100.000 0 Income 0 10 20 30 40 Age 50 60 70 80 Figure 7: Income and Age in FarmingSector Source: AGI & UoM Survey 180.000 140.180.000 140.000 80.000 60.000 100.000 40.000 80.000 160.

5. 0 being the lowest rating and 10 being the highest rating. it is interesting to note that both groups of people have higher level of job satisfaction irrespective of their income and education level. Generally speaking. It implies that there is no direct relationship between the job satisfaction level and the income and education level. people from agribusiness sector are more educated than farmers. 97% of people love their jobs. . As Figure 9 illustrates. Limitations During the process of data collecting and analysis. which aided in the systematic and accurate analysis. The first group of limitations were brought by the design of the survey.4. However. a scale of 0 to 10. was used to measure the job satisfaction level among the participants. there are three groups of limitations in the scope of our analysis.3 Job Satisfaction 3% 97% High Low Figure 9: Job Satisfaction Source: AGI & UoM Survey In the survey. The average of job satisfaction level is 8.

if he/she has just invested in new equipment. his investment can significantly reduce the current year’s taxable income due to the offset of expense. taxable income was used as the indicator of income level. This statement further proves that taxable income is not reliable and comparable. individuals’ income can fluctuate every year. Take a farm owner for an example. as the effective income. especially in the farming sector.This survey is only designed and conducted for the current period. . But taxable income would not be reliable enough to reflect the well-being of an individual. Another issue with the survey is that the on-farm income of farmers and off-farm income of agribusiness is unable to be computed as the interval is adopted to present the income level. Thus the total taxable income is implied. which can distort the influence carried out by the main examined factors. there is a limited access to the target population during the two week’s survey conducting. strategic expenditure or unpredicted expense. The fluctuation may result from the unexpected market condition. like current year’s taxable income. In this survey. changeable weather. Limitations also rose from the data collecting process. Though most of the individual characteristics remain unchanged. rather than a more scientific analysis such as the panel data regression model. Hence simple correlation analysis is applied here to seek the linkage between incomes and individual variables for the empirical specification. It is pointed out by the farmers interviewed that it is more crucial for the farmers to accumulate their assets on the farms rather than focus on short-term profits. First. The measurement of income also has certain defects. in our analysis. A small sample of 57 interviewees was set up and only 23 farmers were approached.

An extensive unbiased sample is required for accurate analysis. However. Also most of the farmers approached through phone interview live near Warragul. for farming sector. Thus it is nonsense and impossible to implement the analysis on this section in our study. For example. First. The others also work in agribusiness. with the current taxable income rises above 100. This population is not appropriate to be a representation for all the farmers in Gippsland. other independent variables that are important factors to influence income level were not able to be accounted in the analysis due to relative small sample. higher education (University degree and University higher degree) is associated with higher income level. A large portion of the interviewees were surveyed primarily at DPI shire office and ABARES regional outlook conference and Victorian Agribusiness Summit. In the data analysis process. This is supported by the positive correlation of 36 %. And this correlation between education and income is also greater than the correlation between income and age and .Another drawback is that the interviewees were not randomly selected and thus the sample was biased. there is little difference from the number of people in each area. There is a high possibility that a proportion of them are less educated than attendants of the conference. such as agriculture sales persons.000 dollar. Phillip Island and Inverloch. based on 57 surveys conducted so far. cropping and so forth is also a factor that causes difference in income level. specializing area of the farmers such as dairy. contractors or land lenders were not included in the sample. Conclusions There are several major finding through our analysis. beef. Thus the excluding of this population biased the sample. 6. Most of them are researchers and bankers and hold university or university higher degrees.

Furthermore. So that curtain fluctuation of income caused by these essential factors could be excluded from the analysis.correlation between income and work experience. Otherwise. the average job satisfaction is scale of 8 out of 10 for the total sample. the limitation of the sample suggests increasing sample size. For the job satisfaction. Recommendations It is suggested that the survey should be conducted every year within a certain period to exclude the influence of unrelated factors. Based on a larger sample. a regression model can be run to estimate a more related relationship between education level and income level. there is not significant correlation between education level and income level. especially for the farming sector. the assets of farmers should also be taken into account in the survey form. 7. These also raise our concerns that some factors. number of partners and management costs and the stage of a farm should also be considered in the survey. it is also recommended that more efficient income measurements could be adopted. . The relatively strong positive relation only exists between work experience and income level. such as farm size. As taxable income could not be a reliable and comparable income indicator. For agribusiness sector. especially in the number of farmers. land use intensity. It implies that there is no direct relationship of job satisfaction with income level and education in agriculture business. For example. exact taxable income is required in the survey to solve the calculation problem of on-farm/off-farm income. Other factors may explain the rest of the correlations for income difference. business type. Once the sample is increased.

calculation of deducting the on-farm/off-farm income is suggested to be performed on the spot of interview. The asset investment amounts of farm owner should be also taken into account to avoid disturbance of such factor. .

Appendix A AGI & UoM Survey LEARN MORE = EARN MORE? University of Melbourne/Agribusiness Gippsland survey. 4. Gippsland June/July 2011 Section A. 3. 2. Gender: Age: How long have you worked in farming/agribusiness? Are you primarily involved in: Other farming Student (horticulture/forestry/lifestyle farm) . Personal Details 1.

Education Level 1) What is your highest level of formal education TAFE Diploma / Advanced Diploma Apprenticeship . What is your role in your work? Owner Manager Farm Partner Sharefarmer/Leasee Operator/employee Agribusiness owner Agribusiness manager Agribusiness employee (includes R&D) 6.5.III 2) What is the title of your highest qualification? _____________________________________ 3) What was the subject of your post-secondary education? .

Estimate your current taxable income: . Rank these in order of importance as sources of information Newspapers/Journals/Magazine Radio/TV Internet/Online Department of Primary Industries Agricultural consultants Agribusiness retailers /salespeople Other famers Other (Specify) _______ ____________________________________________ Section B. Income Level 1.Specify) __________________________ 4) What is been your ongoing education?  How many days/half-days have your spent in the last year at: _______ _______ _______  How many days/half-days have your spent in the past three years at: Short course(s) at an educational institution _______ _______ _______ 7.

000 .000 2. How much of this income is generated off-farm? _____________________________________ .$140. Outlook 1.$80.$120.000 .000 .000 >$160. in five years time do you expect to be: Better off Worse off In a similar position to now Don’t know .$160.000 Section C.$60..$100.000 . Financially.$180. Did you enter agribusiness/farming because it was: A family business A primary career choice A career choice after employment or experience in another job/business/profession (Specify) ____________________________________ 2.000 .

All things being equal. Do you expect to still be in this career in five years time? Yes No Don’t know Can you specify a reason? _____________________________________ 4. do you think you personally could have a more satisfying life style outside farming? Yes No Who knows? THANKYOU . 10 delighted) 1 2 3 4 5 6 7 8 9 10 5. On a scale of 0-10 are you happy / satisfied with your career choice in farming? (0 very unhappy.3.

J. ABARE. Simth. Chicago: the university of Chicago. Department of economics and graduate progrma in human resources. Keith A.education-online-search. (2002). (2009).com/articles/special_topics/education_and_income . Retrieved from Education of Online Search: http://www. Shiji Zhao. W. Job satisfaction of the highly educated: the role of gender.Bibliography Clark.E. O. Satisfaction and comparison income. Journal of Public Economics . Exploring determinants of total factor productivity in Australia’s broadacre gain farms. Job satisfaction in America: trends and socio-demongraphic correlates. Education And Income. (2007). 359-381. academic tenure and comparison income. T. the US Census Bureau. Y. E. S. (1996). Bender.A.