An examination of the links between parental educational qualifications, family structure and family wellbeing 1981-2006

Publication Details

The primary purpose of this report is to examine and describe the relationship between family structure and family wellbeing and the educational qualifications of parents in New Zealand families over the period 1981–2006.

Author(s): Gerard Cotterell, Martin von Randow and Mark Wheldon, The University of Auckland.

Date Published: September 2008

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Section 3: Discussion

This section examines the results outlined in section 2 above, and relates these to wider bodies of literature where relevant. The section concludes with some thoughts on the limitations of the research and directions for future research.

Education and income

The data in sections 2.1 and 2.2 above indicate the clear link between the level of educational qualification held by at least one parent, and both the level of real, median, gross equivalised family income and the likelihood of having a family income that is less than 60 percent of the overall median equivalised family income. For almost every family type in the analysis, and for each census period, there was a positive income gap between those families with at least one adult with either a secondary school qualification or a post-secondary qualification and those where no parent had any educational qualification. The only exceptions to this were one-parent families with dependent children in 1991 and 1996. In addition, the income premium attached to having a higher level of education widened over the period under examination for almost all family types, with couples without children being the exception.

The link between income and the educational attainment of the parent is further reflected in the results for the low-income indicator, where the higher the level of educational attainment, the less likely it was that the family would have below 60 percent of the median equivalised family income.

The results obtained for this project are confirmed by other studies that have examined the association between income level and educational attainment in New Zealand (Maani 1997; Maani and Maloney 2004; Johnston 2004; Smart 2006) and elsewhere (Psacharopoulos 1994). For example, a 2006 study by the Ministry of Education using data from the Statistics New Zealand Income Survey found that people with tertiary qualifications earned much higher incomes than those without such qualifications. The report notes that:

Those with a highest qualification of a bachelors or higher degree received the highest weekly median income ($756 in 2005), followed by 'other tertiary' ($560). People with no qualifications received the lowest median weekly income ($293) (Smart 2006, 53).

The report also notes that the gap between those with no qualifications and those with a bachelor's degree or higher "has decreased from a high point of 186 percent in 1999 to 158 percent in 2005" (ibid., 53).

Similar results are found in other studies. Maani (1999) used census data from 1981 to 1996 to examine the returns from secondary and tertiary education. Her results showed that "the returns to both secondary and tertiary education are significant and that compared to 1981, returns to all educational qualification levels were significantly higher in 1996" (Maani 1999, 31). In a later study using data from the Statistics New Zealand Household Labour Force Survey Income Supplement, Maani and Maloney (2004) reported similar results. In a more recent study, Nair found that:

The higher the level of study, the higher were people's earnings. The completion of a tertiary qualification at any level also increased earnings. The highest premium was earned by people who had completed a bachelors degree. Individuals with a bachelors degree earned 28 percent more than those who did not complete their bachelor-level studies (Nair 2007, 5).

Education and employment

The link between educational attainment of one or more parents and whether a family has no parent(s) in paid employment is clear in the data. The higher the level of educational attainment of the parent, the lower the likelihood that no parent in the family is employed.

The relationship between educational status and employment status has been investigated by other researchers in New Zealand, but this research typically tracks the relationships between individual income and individual educational status, and not between families and educational status. For example, Smart (2006) used data from the Household Labour Force Survey and the New Zealand Income Survey to examine the relationship between earnings, educational attainment and employment status. Smart found that:

In 2005, the median weekly income of a person with school qualifications ($301) was 1.03 times higher than that of a person with no qualifications ($293). However, the unemployment rate of a person with no qualifications (6.4 percent) was 1.5 times higher than that of a person with school qualifications (4.2 percent) (Smart 2006, 84).

All family types in the analysis experienced a rise in the proportion where one or more adults were working 48 hours or more, regardless of the level of qualifications held. In addition, for each family type at each census point, it was families where an adult had post-secondary qualifications that showed higher proportions with a parent working long hours than their equivalent family types with no qualifications. This appears to corroborate arguments that the demand for unskilled labour has decreased while the demand for skilled labour has increased. Given recent media coverage over the shortage of skilled workers, it suggests that many are working longer hours to compensate for this shortage.

Education and housing tenure

There is an obvious link between the holding of higher educational qualifications and home ownership, via the higher income typically obtained from the holding of such qualifications. However, the rising cost of education in the last 15 or so years, reflected in higher student fees and higher student loans, coupled with the recent increases in the cost of housing, serve to cast some doubts upon the strength of this relationship.

However, recent research by Scobie et al. (2005), which examined the statistical relationship between student loans and home ownership, found that the presence and size of a student loan does not appear to affect the probability of a couple having a mortgage (Scobie, Gibson, and Le 2005).

Education and wellbeing in general

Other research has found that the level of educational attainment is associated with a range of other aspects of wellbeing. For example, Nair et al. (2007) examined the relationship between education level and mortality rates and found that "people with a highest qualification at the tertiary level had lower mortality rates from all causes than people with a highest qualification at school level or those with no qualifications" (Nair, Smart, and Smyth 2007, 213).

In an earlier study of overall levels of wellbeing, Jensen et al. found that "People with no formal qualifications are the most likely to have living standard scores at the lower end of the ELSI distribution" (Jensen et al. 2006, 75); that is, they were more likely to be worse off than the general population.

Strengths and limitations of the study

The primary strength of this study is the availability of census data, which theoretically covers the whole population. The inclusion of the entire population allows an analysis of changes in family wellbeing for a wide range of family types and for different ethnic groups. Changes in wellbeing for small sub-groups of the population, whose attributes are not captured in sample surveys, can therefore be examined using these data.

There are, however, a number of constraints on the ability to measure wellbeing using census data. The primary limitation of the analysis is that the range of indicators used is limited by the data that are collected in the five-yearly census. A second limitation occurs because the census only captures information about family members living in the same physical dwelling. This excludes extended families that live at more than one physical location and those where a child might live with each of their separated parents at different times.

Second, although this research uses cross-sectional information to create time-series data on different groups of people, it must be recognised that this is not a longitudinal study. The families and households studied do not contain exactly the same individuals from one census to the next. While associations and links can be made between different groups or circumstances and wellbeing, causal pathways cannot be shown.

Future research

A number of possible avenues for future research on the links between educational achievement, family type and wellbeing could be pursued. Firstly, an examination could be carried out which takes into account the ethnicity of the parents. Secondly, further examination could be undertaken of the differential impacts occurring in terms of whether the educational qualifications are held by a male or a female. Thirdly, the range of educational qualification categories used could be expanded by including extra categories to further the analysis (e.g., by making a distinction between degree and non-degree qualifications when analysing post-secondary qualifications).

Footnote

  1. The ELSI scale is a measure constructed by the Ministry of Social Development to measure the living standards of the general population. The scale is "based on what people are consuming, their various forms of recreation and social participation, their household facilities and so on, rather than being calculated from the resources (income, financial resources and assets) that enable them to do those things" (Jensen et al. 2006, 19).

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