Tertiary education, skills and productivity

Linking qualifications, skills and productivity

The information and research reviewed above confirms that the increased levels of qualifications in the workforce have fed through to improved quality of labour and contributed to labour productivity growth. However, this contribution has been dampened by the expansion of the workforce to include more low-skilled workers and greater reliance on migration to fill skill gaps. Firm turnover may also have had some effect in dampening productivity.  New Zealand’s small size and relative isolation pose additional challenges to achieving high rates of labour productivity.

Increased skills derived through tertiary education do contribute to increased productivity. How skills are utilised within firms and combined with capital, technology and knowledge investment is also critical to raising productivity. Raising capital, multifactor and labour productivity need to be addressed together, along with improving industry investment in R&D. This needs to be considered in the wider context of improving economies of scale and reducing the cost of getting goods and services to market.