Tertiary education across Australia has shed almost one in five jobs, with the federal government urged to boost funding amid warnings things are getting worse.

A report by the progressive Australia Institute think tank shows the sector shrank by nearly 40,000 positions in the 12 months to May 2021.

Only agriculture lost more jobs, with the nation closed off to the world because of the COVID-19 pandemic.

The report warns reduced staffing and increased casualisation is degrading the quality of education.

It also says job losses could be stopped if the federal government provided an extra $3.75 billion each year until international students returned and normal teaching resumed.

Most tertiary education jobs went from public universities, more than 90 per cent were full-time roles and women were disproportionately put out of work.

Before the pandemic, the sector had strong average growth of about 10 per cent a year between 2015 and 2020.

The report urged the federal government to compensate for border closures with $3.75 billion to restore the estimated 35,000 jobs shed from public universities.

“This may seem expensive, but relative to the scale of support given to other sectors in the economy – and relative to the revenue losses experienced from the Commonwealth’s decision to close borders – it is modest and appropriate,” the report said.

Education Minister Alan Tudge acknowledged COVID-19’s significant impact on higher education but insisted the government had provided significant support.

Mr Tudge singled out support for private universities and maintained the majority of universities started 2021 with relatively strong financial positions.

Public universities did not qualify for the government’s JobKeeper wage subsidy program.

-AAP