Social and economic indicators of education
This report uses data from the 2008 New Zealand General Social Survey to explore how a range of 30 social and economic indicators vary with education. It provides evidence supporting known economic benefits, and new evidence on a range of social indicators, including health and safety, voting, volunteering, social cohesion, national identity, tolerance and environmental practices.
Author(s): David Scott, Tertiary Sector Performance Analysis and Reporting [Ministry of Education]
Date Published: August 2010
This report presents new information from the 2008 New Zealand General Social Survey on how different levels of education are associated with a range of social and economic indicators. It finds that for New Zealanders aged 25 to 64:
- Education was positively associated with:
- Higher income (strongly) and rates of employment (moderately)
- Higher economic standard of living (moderately)
- How healthy you think you are, and not being a smoker (both strongly)
- Higher tolerance of immigrants, different values, ways of living, and ethnic diversity (moderately to strongly)
- Volunteering (moderately)
- Whether you voted (moderately for NZ-born only)
- Whether you lived in a household that recycles (moderately)
- Overall satisfaction with life (weakly to moderately)
- Less feelings of depression (weakly)
- Higher income (strongly) and rates of employment (moderately)
- Education did not in the main appear to be associated with:
- Overall mental health
- Job satisfaction
- National identity (for NZ-born adults, but weakly negative for non-NZ-born)
- Feelings of isolation (for NZ-born, weakly negative for non-NZ-born)
- Whether you'd seen family or friends in the last 4 weeks (for NZ-born, but strongly negative for non-NZ-born)
- Whether you lived in a household that did things to save energy or water
- Being a victim of crime or in a traffic accident.
- Many of the wider benefits associated with having a tertiary qualification remained after adjusting for the effects of income, age, gender, and whether people born in NZ or not.
- Low-level (level 1 to 3) post-secondary qualifications are likely to convey some benefits relative to not having a qualification, but fewer benefits than upper-secondary qualifications.
- There were some economic and social benefits for those with year 11 school qualifications who stay on to complete year 12 or 13 school qualifications.
- Adults without qualifications face significant disadvantage across many non-economic indicators, as well as across indicators such as employment and income.
Background and Purpose
The report makes use of new information from the first New Zealand General Social Survey (NZGSS) to look at how different levels of education are associated with a range of different economic and social indicators. The NZGSS was conducted for the first time between April 2008 and March 2009 and surveyed over 8,700 New Zealanders aged 15 and over. The results in this report are based on some 6,400 adults, representing the population of nearly 2.4 million New Zealanders aged between 25 and 64.
While it is accepted that people without a secondary education qualification are disadvantaged economically, this report looks at the impact a lack of secondary qualifications has on other aspects of life. It also explores what differences there might be between those who leave with just one-year upper secondary qualifications, and those who have higher-level school qualifications. This report also provides further information on the question of the benefits or otherwise of low-level post-secondary qualifications. Finally, for those with higher-level tertiary qualifications the report explores the extent to which personal and social benefits remain after you adjust for higher employment and earnings.
This report adds to a growing information base on the social and personal benefits of education. While the direct contribution of education to these benefits is not established, this growing information base provides suggestive evidence of significant non-financial benefits associated with further education. Apart from improved intrinsic social benefits associated with higher levels of education, there may be indirect financial benefits, both private and public, such as those implied by the relationship between education and not smoking. Increasing the evidence base on the intrinsic and financial benefits of education, over and above employment and income, will assist individuals and societies in their education investment decisions.
The report is descriptive in nature, and does not, in general, explore underlying factors, causal directions or the existing literature in depth. Instead, it aims to tap into the rich new information collected in New Zealand's first General Social Survey to provide a picture of how education is associated with 30 selected social and economic indicators. In particular, it focuses on social indicators for which there has been little information in the past. Mechanisms and causal directions between education and these outcomes are matters for further research. While education may be a factor leading to improved outcomes in some areas, in other areas it may be the poorer outcome that is acting as a barrier to further education.
Care is needed, therefore, when making inferences from these results. While this report shows a common pattern of positive increases with education, sample errors in some cases were such that we can not draw conclusive inferences about whether the differences observed do in fact represent 'real' differences in the population. It is also important to consider that for many indicators, factors other than education may well explain more of the observed difference. Age, gender, income and immigrant status are a few that are discussed in this report.
Indicators are examined across eight levels of highest qualification attainment. Figure 1 shows the distribution of 25 to 64 year-olds in the NZGSS by these education levels.
Of the 30 indicators examined, most followed a similar pattern of association with these education levels. Those with no qualifications had significantly lower results. Those with level 1 to 3 post-school certificates also had lower results, which were often worse than those with school-level qualifications. Those with level 2 or 3 (ie year 12 or 13) equivalent school qualifications as their highest level of education often had better outcomes than those with qualifications from just one year of upper secondary. Those with level 4 certificates had mixed results. Among the older people with level 4 certificates especially, the results often sat between those for adults with level 1 school qualifications and those for adults with higher level upper secondary qualifications. Indicator results for those with diplomas were usually better than the results for those with just school qualifications. These differences were often more significantly higher for those with bachelors degrees, and higher again for those with postgraduate qualifications.
However, the size of the effects varied considerably. Not all differences were significant, either statistically or materially, and some indicators followed this pattern only partially or not at all. Results were sometimes moderated by other factors such as age, income and whether you were born in New Zealand or not.
Figure 1: Percentage of 25 to 64-year-olds in the NZGSS by highest level of education attainment
Error bars show 95% confidence intervals.
Adults with no qualifications
The most material differences were for those with no qualifications. This group made up 17% of 25 to 64 year-olds (from 10% of 25 to 39 year-olds to 27% of 55 to 64-year-olds). While it is accepted that people without a secondary education qualification are disadvantaged economically, the NZGSS data provides some new estimates of the scale of disadvantage, and for some lesser-known outcome areas.
For example, compared to those with even just a level 1-equivalent school qualification, those with no qualifications were 23% less likely to rate their health as very good or excellent. They were 19% less likely to be employed in 2008, and the median household income for this group was 17% lower. They were 25% less likely to have a good or very good economic standard of living (as measured by the Economic Living Standard Index, or ELSI), and nearly 30% less likely to rate their standard of living as high. They were 16% less likely to volunteer and 12% more likely to smoke. However, they were only 3% less likely to vote than those with one year upper secondary qualifications.
They were 16% less likely to agree that it was good for NZ to have immigrants from different cultures, and 10% less likely to agree that it was good to for NZ to be made up of different ethnic groups.
In other cases, having no qualifications did not appear to be associated with adverse outcomes – for example, mental health, job satisfaction and national identity. In a few cases, there was a hint that having no qualifications may have even been associated with a possible advantage. This included the likelihood of not being a victim of crime in the last 12 months, or having done things to save energy or water.
There was strong evidence to support the benefits of staying on an extra year at school.
For 10 of the 30 indicators in this report, those with a level 1 or equivalent upper secondary qualification had moderately to significantly lower results than those whose highest qualification came from two or more years of upper secondary. People with a level 1 school qualification were 12% more likely to smoke than those with a higher-level school qualification and they rated their health 10% worse. Personal income was 14% lower, household income was 10% lower and they were 12% less likely to rate their standard of living highly. They were 19% less likely to volunteer and 6% less likely to have voted. Differences in age, gender, income and immigrant status did not completely account for these effects.
However, in many other areas, there was no significant difference; including employment rate, economic standard of living, overall life satisfaction, social contact, mental health, national identity and environmental practices.
Around 12% of all 25 to 64-year-olds had a level 1 or equivalent upper secondary qualification as their highest education. New Zealanders are more likely to return to year 12 or 13 than they were in the past. For example, 14% of 25 to 39-year-olds have level 2 or 3 school qualifications compared with 10% of 55 to 64-year-olds. Even though it is more common now to return to year 12, New Zealand still has a much higher proportion of people who leave after one year of upper secondary than other OECD countries (OECD, 2009, Table A2.1).
Low-level post-secondary education
About 9% of adults aged 25 to 64 had a post-secondary certificate at level 1 to 3 as their highest qualification. While level 1 to 3 post-school certificates are at the same educational level as school level 1 to 3 qualifications, results for the majority of social and economic indicators for this group were worse than the results for those with any level of upper secondary qualification. However, results for this group were better than those of the group with no qualifications.
Compared with those with level 2 or 3 school qualifications, the group with a level 1 to 3 post-secondary certificate as their highest qualification were 4% less likely to be employed, their median personal income was 15% lower and their median household income was 12% lower. Their standard of living was around 13% lower. They were 13% less likely to rate their health highly, 8% more likely to smoke, 6% more likely to have feelings of isolation, and 9% less tolerant of immigrants. Mental health, ethnic diversity, and likelihood of having a partner were also lower, but these differences were not statistically significant.
However, there was no difference in likelihood of voting or volunteering between the two groups. There was also no difference in levels of national identity, social contact, or having been a victim of crime or in a traffic accident in the last 12 months.
Those who undertake level 1 to 3 post-secondary study are often those who did not engage at school, and who left with no school qualifications. The type of study often acts as an alternative pathway back into education and better employment, and has an important role in providing a bridge into higher tertiary qualifications. There are, therefore, likely to be factors characteristic of this group, other than education, that are influencing their poorer results relative to the school group. The positive results relative to the group with no qualifications, however, suggest there are benefits from this type of education, even if the person doesn't use the level 1 to 3 qualification as a means of progressing to higher-level education.
Tertiary certificates and diplomas
About 12% of adults aged 25 to 64 in the NZGSS had a level 4 certificate as their highest level of qualification, while a further 14% had a diploma. Level 4 represents a basic vocational or trade education at a level beyond school, generally recognised by a certificate gained after one year's study. Diplomas represent a more advanced vocational qualification usually requiring at least two years' study.
While the level 4 group had an even distribution of ages, the diploma group had a slightly higher proportion of older adults than other levels of qualification. The level 4 certificate group, however, was distinctly more male than other groups. Around 76% of this group were male, compared with 41% for the diploma group, and between 40% and 50% for other levels. Not only was this group over-represented by men, but the results for women with level 4 certificates were often significantly worse than those of men with level 4 certificates. Results for this group were significantly moderated by these gender differences. In part, the gender imbalance reflects the fact that many trade qualifications are at level 4, and men are overrepresented in trades.
Outcomes for those with level 4 tertiary certificates were better than for those with level 1 to 3 post-secondary certificates but were otherwise mixed, generally sitting in between the results for those with level 1 school qualifications and those with higher level upper secondary qualifications. Many of those with level 4 qualifications have left school after just one year of upper secondary or less. In a similar way to those with level 1 to 3 post-secondary qualifications, this selection effect is important to consider when making inferences about the benefits of level 4 study.
There is also a difference on some indicators between older and younger people who held level 4 certificates. Outcomes tended to be better for younger people, reflecting differences in how the qualifications system has evolved.
Men with level 4 certificates were employed at a similar rate to men with level 1 or higher school qualifications. However, women with level 4 certificates were employed at a similar rate to women with level 1 to 3 certificates, about 7% lower than that of women with school qualifications. Personal incomes for men and women with a level 4 certificate were slightly above those with level 1 school qualifications, but slightly below those with higher level school qualifications.
Comparison of the standard of living indicators between men with level 4 certificates and men with either level 1 or level 2-3 school qualifications was mixed. However, results for women with level 4 certificates consistently showed significantly lower standard of living ratings than those of women with any level of upper secondary qualification.
The health status of men with level 4 certificates sat between those of men with level 1 and level 2-3 school qualifications, while the health status of women with level 4 certificates generally sat below that of women with school qualifications. A similar pattern was observed for rates of smoking, and rates of volunteering. Social tolerance indicator results for men with level 4 certificates were lower than those of men with any level of upper secondary qualification. Social tolerance indicator results for women with level 4 certificates generally sat between those of women with level 1 and women with level 2-3 school qualifications. No significant differences were observed for the indicators on mental health, national identity, social contact and environmental practices, and overall life satisfaction.
Results for the group with diplomas were generally better than those of the school groups and below those of the bachelors group. They were 7% more likely to be employed than those with school qualifications, and median personal incomes were 9% higher. Their economic standard of living was 9% higher (as measured by ELSI) and 12% higher in terms of their own self-rated responses. They were 7% less likely to smoke, although on other measures of physical and mental health status there was less difference from the schools group. They were 10% more likely to volunteer and 5% more likely to vote.
However, there was no difference between the diploma group and the schools groups on the indicators measuring social tolerance, national identity, social contact, environmental practices and overall life satisfaction.
Bachelors and postgraduate qualifications
Those with a bachelors degree or higher qualification made up 23% of 25 to 64-year-olds. Of these, 10% had a postgraduate level qualification. This group was more likely to be younger (44% of this group were aged 25 to 39), but there was no gender difference at either bachelors or postgraduate level. Significantly over-represented in this group were overseas-born adults. Some 40% of bachelors and 46% of postgraduate-educated adults in NZ were born overseas, compared with 26% overall. This moderated the results for several indicators.
In the main, adults with degree and postgraduate qualifications had better outcomes. Compared to those with level 2 or 3 upper secondary qualifications, those with bachelors degrees had 29% higher personal income and 22% higher household income. They were 7% more likely to be employed in 2008. They were 17% more likely to have a good or very good standard of living (as measured by ELSI), and they were 19% more likely to rate their standard of living highly. They were 18% more likely to volunteer and 6% less likely to feel depressed.
They were 7% more likely to rate their health as very good or excellent and 9% less likely to smoke. They were 15% more tolerant of immigrants and 5% more tolerant of ethnic diversity. They were 10% more likely to recycle.
For a few indicators, there appeared to be no difference, or the difference was small and not statistically significant when compared to those with upper secondary qualifications. Degree-educated adults had the same overall life satisfaction, mental health score, and likelihood to vote as those with upper secondary education as their highest qualification. Their satisfaction with their standard of living was the same, despite their higher household income.
For most indicators, a postgraduate education improved results further. While not all the increases were statistically significant when compared with the bachelors results, they were all generally higher. The employment rate for those with postgraduate qualifications was 3% higher than that of bachelors and 8% higher than the schools group. Their median household income was 18% higher than that of the bachelors group, and 44% higher than that of the schools group. They were significantly more likely to have a good or very good standard of living. All of the tolerance indicators increased significantly. They were 6% more likely to volunteer than the bachelors group. They were the only group to show a statistically significant higher level of satisfaction with their life compared with other levels.
Three indicators were particularly affected by the higher representation of overseas-born people among degree-educated adults. When NZ and overseas-born were included together there was a moderately strong negative relationship with education for the indicators on national identity (how strongly you feel you belong to NZ) and social contact (whether you had seen family or friends in the last four weeks). When analysed separately, this association disappeared for NZ-born. Similarly, there was a moderately strong association between education and voting for NZ-born, which reduced significantly when overseas-born were included.
These results from the NZGSS support previous research on the benefits of education on employment, income and living standards, and self assessed health status. They also suggest that views on tolerance are moderately to strongly associated with education. They suggest no, or only weak, links between education and mental health, and a slightly stronger link to less feelings of depression. They show that higher-educated people are more likely to volunteer, to vote, and to recycle, but only slightly more likely to be satisfied with their lives. The results also show, however, that education does not appear to make much difference to national identity, social contacts, and how satisfied you are with your job.
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