Executive Summary

The research found that 9 per cent of industry trainees were living overseas seven years after completion, and had been overseas for at least three years – the best available indicator of permanent emigration. This was lower than the rate for graduates from tertiary institutions, but higher than the rate for the general New Zealand population. Prior research on emigration rates has shown than younger and more highly educated tertiary graduates are more likely to emigrate. The results for industry trainees are consistent with this general pattern.

Purpose and key question

We are interested in better understanding the extent to which industry trainees leave New Zealand after completing their study and therefore do not contribute to New Zealand's human capital. There are concerns that some types of industry trainees (for example, those who have trained to work in the building industry) are attracted to Australia, and the skills they accumulate are therefore lost to the New Zealand economy. Knowing the extent to which this happens can help us better understand the factors associated with availability of different types of skills. This is a particularly important issue currently as building companies seek skilled labour for the Canterbury rebuild.

Key indicators

Our first two indicators look at the migration decisions that industry trainees make: whether to leave New Zealand for an extended period and, for those who do leave, whether to return or not. Our third measure looks to show the net effect1 of these two decisions after 7 years. This last indicator is a deliberately conservative measure of those still away – the closest we can get, given our data, to estimating the proportion of trainees who leave New Zealand permanently. We measure:

• leaving - the proportion of all industry trainees who left New Zealand for a year or more in the 7 years after completing their qualification
• returning - the proportion of industry trainees who left New Zealand in the first 2 years after completing their qualification who were back in New Zealand in years 4 and 5 after leaving
• still away - the proportion of all industry trainees who were abroad 7 years after completing their qualification and had been for at least the last 3 years.

Main findings

Our main findings are summarised below:

• Around one in six industry trainees (17.2 per cent) left New Zealand in the 7 years after completing their qualification. This is lower than the leaving rate for tertiary graduates (25.9 per cent) but higher than the rate for the New Zealand population (11.0 per cent).
• Of those who left in the 2 years after completion, around a third (33.9 per cent) were back in New Zealand 4 years later. This is a higher rate of return than for tertiary graduates, of whom only one in four had returned after 4 years. It is also a slightly higher rate than for the New Zealand population, of whom around 30 per cent had returned. We speculate that the skills and work experience obtained through industry training means that trainees can earn high wages in overseas labour markets more quickly than tertiary graduates, enabling them to return to New Zealand earlier.
• Of all trainees, 9.1 per cent were abroad 7 years later and had been abroad for at least 3 years. This is less than the rate for tertiary graduates (15.1 per cent) but higher than the rate for the New Zealand population (6.1 per cent).