Unemployment rate by highest qualification

What We Have Found

People with a tertiary education are more likely to be in employment, and less susceptible to overall fluctuations in levels of unemployment, than those without a tertiary qualification.

Date Updated: June 2011

Indicator Description

Unemployment rates by highest qualification.

Why This Is Important

The success of an education system is manifested in, among other things, the success of individuals in finding sustainable employment.  There is a substantial body of evidence showing that those with higher levels of education are more likely to participate in the labour market, face lower risks of unemployment, as well as having greater access to further training and receive higher earnings on average.  These labour market advantages are an important outcome of education.  They may even be the primary economic and social outcome, because earned income enables people to achieve a higher standard of living and many of the other individual and national outcomes associated with education may accrue either directly or indirectly from this.

This indicator shows the relative unemployment chances associated with extra education.  Movements in the relative measures of employment can reflect changes in the relative labour market value of particular skills and levels of education, and changes in the skill requirements of the overall economy.  The increasing labour market demand for young people with upper secondary and tertiary education qualifications foreshadows an increasing risk of exclusion for those individuals with lower attainment.

International data suggest that on average across the OECD, tertiary education more than halves the expected period of unemployment over a working life.

How We Are Going

Since 1991 people with no qualifications have had unemployment rates exceeding those with qualifications. 

After the steady decline in unemployment between 1998 and 2006, the rates are on the rise again as the 2008/09 recession impacts employment opportunities.  Between 2006 and 2010 the unemployment rates have doubled.

In 2010, those with no qualifications had the highest unemployment rates (9.4%). People whose highest qualification was a school qualification had an unemployment rate of 8.3%.  Those with tertiary qualification other than degree had an unemployment rate of 5.8%, while the lowest level of unemployment was among people with bachelors degrees (4.1%).

The historical data show that those with no qualification are most susceptible to the economic downturns while the unemployment rates for people with tertiary qualifications remain least volatile. In addition the gap between the unemployment rates of those with and without qualifications has narrowed down over the last two decades.

References

Ministry of Education (2010). Facing the Challenge - Tertiary Education Strategy Monitoring 2010. Wellington: Ministry of Education.

OECD (2010). Education at a Glance 2010: OECD Indicators. Paris: OECD.

Statistics New Zealand (1991-2010). Household Labour Force Survey (June 2011 Quarter). Wellington: Statistics New Zealand.