Year 12 students are flat out – preparing for final exams and life after school. Some are planning to go straight to university, others are looking to take a ‘gap year’ before going uni.
Below is a short extract from my book, Myth Busting Economics, about the cost of taking a gap year. Read it and think.
And if you want a copy of my book, it is available here: https://www.booktopia.com.au/myth-busting-economics-stephen-koukoulas/prod9780730321958.html
A gap year? Don’t do it!
A common notion for some students when they finish Year 12 is to have a so-called gap year. That is, they take a year off to do something different and postpone the decision to start university by a year. That is all fine and again, it is your choice, but it is worth thinking about the cost of doing so. Let’s look at a stylised example of the cost of a gap year.
There are two people, they have just finished Year 12, have equal abilities, achieved the same university entry score, aim to do the same three year degree and when they finish their degrees, they will get a job where the starting salary is around the average for university graduates in 2013 at $52,500 a year. One goes straight to university, the other takes a gap year, traveling around Europe and generally bumming around home.
Let’s fast forward four years.
The ‘gappie’ has just finished university and is about to start their career in paid employment. The other has finished their first year in paid employment, has taken home around $42,500 in after tax income and is on their way in the working world with all the joys of earning an income. The worker also has accumulated around $5,000 in their superannuation fund.
That gap year looks to have been pretty expensive from the perspective of opportunity cost, if nothing else.After another year, the gappie has collected their $42,500 in take home pay and now has $5,000 in superannuation, but the worker now has taken home $85,000 and has over $10,000 in superannuation and has gained valuable work experience. And who will be the first to get the promotion to the $70,000 role a step or two up the ladder?
Gap years are fine and go for it if you want to, but they are very expensive for both child and parent.