Tertiary education, skills and productivity

Changes in education and skills

High growth in tertiary education attainment

Over the last 15 years, the proportion of employed New Zealanders with higher-level educational qualifications has increased. From 1992 to 2008, the proportion of employed people with a bachelors degree or higher qualification increased from 10 percent to 21 percent. The total proportion of employed New Zealanders with post-school qualifications increased from 49 percent in 1992 to 57 percent in 2008 and the proportion with no educational qualifications decreased from 26 percent to 19 percent.

Figure 1:  People in employment by highest qualification

Source: Statistics New Zealand, Household Labour Force Survey, June quarters.

As the labour market has gone through various changes, so have the characteristics of the additional employees. From 1992 to 1996, there was high, but decreasing unemployment and high job growth. In this period, the majority of new employees had school qualifications and tertiary certificates and diplomas. From 1996 to 2002, there was a brief return to higher unemployment and decreasing employment. During this period, the net increase in the workforce was in people with tertiary qualifications. From 2002 to 2006, unemployment was low and the number of jobs was increasing steadily. The majority of the increase in employment was in people with bachelors degrees and above. However, there was also increased employment of people with no qualifications or school qualifications only, as more unskilled adults were able to find employment. From 2006 to 2008, job growth decreased and unemployment started to increase. During this most recent period, increased employment was for those with either degrees or no qualifications.

Figure 2:  Average annual change in the number of people employed by qualification level

Source: Statistics New Zealand, Household Labour Force Survey (June quarters).

High rate of skilled migration

Inward and outward migration is a significant factor for New Zealand when considering skills in the workforce. New Zealand has one of the highest proportions of tertiary educated¹ people residing overseas. Overall, the number of New Zealanders with a tertiary education living outside the country is more than made up for by the number of people with a tertiary education who have immigrated to New Zealand (Dumont and Lemaître, 2005).²

Over the period from 1996 to 2006, New Zealand had a very high rate of immigration to meet high employment growth in skilled occupations. In 2006, 12 percent of people in employment had first arrived in New Zealand within the previous 10 years. However, 31 percent of people employed with a postgraduate qualification and 21 percent of people with a bachelors degree had arrived since 1996.

Of those who were employed in 2006 and who had arrived in the previous ten years, 58 percent spoke English as an additional language. The proportions for those with bachelors degrees or higher were over 60 percent. This resulted in 14 percent of all people in employment in 2006 speaking English as an additional language, with the proportions for people with bachelors and postgraduate qualifications being 21 and 31 percent respectively.³ 

Little overall change in average literacy skills

Despite the growth in the proportion of employed people with tertiary qualifications, the average English-based literacy skills of people in employment have not changed much. International surveys of adult literacy, conducted in 1996 and 2006, show little change in the distribution of English-based skill levels for prose literacy (understanding continuous text). In 1996 and 2006, 60 percent of people in employment had sufficient prose literacy skills to participate in a knowledge society (level 3 and above). For document literacy (understanding tables and charts) there was a small increase in the proportion of people in employment with higher levels of document literacy from 57 to 60 percent (Satherley, Lawes and Sok, 2008).

Figure 3:  Distribution of document literacy levels for people in employment by qualification level

Sources: International Adult Literacy Survey (1996) and Adult Literacy and Life Skills Survey (2006)

The overall lack of change in skill levels came from two main sources. While the number and proportion of degree qualified employees increased, the average English-based literacy of employees with degrees decreased. This is due to increased proportion who were recent immigrants with English as an additional language, as discussed above. The other source was been the increased number of people employed with school or no qualifications, who had lower literacy levels. The effect of this can be seen particularly in the decrease in the average skills of employees with school qualifications, as more people with low literacy were employed.

Footnotes

1. That is a diploma, degree or postgraduate qualification.

2. Figures in this study cover OECD countries only and do not include an number of Asian countries which are significant source countries for migration to New Zealand.

3. Figures are derived from the Adult Literacy and Life Skills Survey 2006.