Cross-strategy indicators – Tertiary Education Strategy monitoring 2009

5. Outcomes of tertiary education

Tertiary education and income

People aged 25 to 39 with a bachelors degree or higher have maintained their real earnings over the last decade, with earnings increasing over the last two years.

As demand for labour increased from 2000 to 2007, real earnings increased for 25 to 39 year olds with lower-level tertiary qualifications and school qualifications only.

Figure 5.1: Real median hourly wages for 25 to 39 year olds by level of qualification

Source: Statistics New Zealand, New Zealand Income Survey.

In the 25 to 39 year old age group, European New Zealanders with tertiary certificates or diplomas as their highest qualification continued to have higher median wages than people from the other ethnic groups.

Figure 5.2: Real median hourly wages for 25 to 39 year olds with tertiary certificates or diplomas by ethnicity

Source: Statistics New Zealand, New Zealand Income Survey.

Pasifika aged 25 to 39 with bachelors degrees have made considerable gains in earnings over the last six years and now have earnings equivalent to Europeans in the same age group.

There has also been an overall increase in earnings for Māori aged 25 to 39 with bachelors degrees.

Earnings for Asians and others aged 25 to 39 with bachelors degrees have remained lower.

Figure 5.3: Real median hourly wages for 25 to 39 year olds with bachelors degree or higher by ethnicity

Source: Statistics New Zealand, New Zealand Income Survey.

Males aged 25 to 39 with tertiary qualifications earn more on average than females. Males with bachelors degrees or higher have benefited more from recent wage increases than females with bachelors degrees or higher.

Figure 5.4: Real median hourly wages for 25 to 39 year olds by highest tertiary qualification and gender

Source: Statistics New Zealand, New Zealand Income Survey.

Tertiary education and employment

As the economy improved in the period to 2007, unemployment rates dropped to similar levels for 25 to 39 year olds with school and tertiary qualifications.

Unemployment rates remained relatively high for 25 to 39 year olds with no formal qualifications and the latest data shows that rates are picking up for this group as the economy goes into recession.

Figure 5.5: Unemployment rate for people aged 25 to 39 by highest qualification

Source: Statistics New Zealand, Household Labour Force Survey.

In 2006, Europeans aged 15 and over with bachelors degrees had the lowest unemployment rates, followed by Māori, Pasifika and then Asian groups.

Europeans who had a tertiary certificate or diploma also had lower unemployment rates than other groups.⁴ 

Figure 5.6: Unemployment rate for people aged 15 and over by ethnic group and highest qualification

Source: Statistics New Zealand, New Zealand Census of Population and Dwellings 2006.

In the past, women aged 25 to 39 with qualifications below degree level have had higher unemployment rates than men in the same age group with similar qualifications, and than both men and women in the same age group with bachelors degrees or higher.

Those differences largely disappeared as overall unemployment decreased in the period to 2007.

Figure 5.7: Unemployment rates for 25 to 39 year olds  by gender and level of highest tertiary qualifications

Source: Statistics New Zealand, Household Labour Force Survey.

Private and public rates of return⁵

Obtaining a qualification at school level or tertiary certificate level has quite high private rates of return, compared with no qualification. Public rates of return are lower, reflecting the lower impact of additional taxes, particularly for females.

The rates of return for older students studying at this level are lower than for school leavers, but still substantial.

Figure 5.8: Private and public rates of return for an individual obtaining a school or certificate qualification (2004)

Source: Organisation for Economic Cooperation and Development, Education at a glance 2008.

Obtaining diploma- and degree-level qualifications provides additional returns privately and publicly.

Private rates of return are higher for younger students, reflecting a longer period of increased lifetime earnings.

The OECD figures show an exceptionally high public rate of return for males studying at age 40 in New Zealand.

Figure 5.9: Private and public rates of return for an individual obtaining a diploma or degree qualification (2004)

Source: Organisation for Economic Cooperation and Development, Education at a glance 2008.

Health and well-being

Mortality rates show an association between higher levels of education and improved health.

Mortality rates for adults have been improving over the last 20 years. Improvements have been proportionally greater for people with school and tertiary qualifications than for those with no qualifications.

Figure 5.10: Standardised mortality rates (from all causes) for the population aged 25 to 74 by gender

Source: University of Otago, New Zealand Census-Mortality Study. Note: Error bars show the 95% confidence interval for the mean.

Māori and Pasifika continue to have higher mortality rates than Asian and European New Zealanders.

For Māori women there is a particularly strong association between tertiary education and improved health.

The association is less clear for Pasifika, mainly due to sample size issues in the data.

Figure 5.11: Standardised mortality rates (from all causes) for the population aged 25 to 74 years by gender and ethnic group, 2001-2004

Source: University of Otago, New Zealand Census-Mortality Study. Note: Error bars show the 95% confidence interval for the mean.

Footnotes

4. Data on unemployment by labour force status by highest qualification level and ethnic group is not available from the Household Labour Force Survey due to sample size limits.
5. The data shown here uses an actuarial method to calculate returns. It is not an economic analysis of return on investment nor does it include any social dimensions of returns or flow-on benefits of a more educated population.