School to work: What matters? Education and Employment of Young People Born in 1991

Publication Details

This study explores the education and employment experiences of young people born in 1991. The main purpose of the study is to explore the kinds of employment and labour market measures that can be derived from data in Statistics New Zealand Integrated Data Infrastructure (IDI) and how these vary across groups of young people with different educational experiences and achievement.

Author(s): David Earle, Tertiary Sector Performance Analysis, Ministry of Education.

Date Published: June 2016

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Summary

Key Points
School experience can be looked at in two ways: performance and engagement. Performance can be measured through relative achievement in NCEA. Engagement can be measured by whether students have been stood down, suspended or had serious truancy.

Young people with higher school performance and no experience of disengagement are much more likely than other young people to go on to tertiary education and to find full employment.

Young people who were disengaged at school are more likely to leave New Zealand or to be not in employment, education or training (NEET). This effect is over and above any effect of their level of school performance.

School background and achievement are strongly related to the extent to which young people are employed. A higher proportion of young people with NCEA Level 2 or higher were in employment. The majority of young people in full employment, and no longer in study, had attained at least NCEA Level 2 and/or studied tertiary education at Level 4 and above.

However, earnings for young people are mostly dependent on whether they are in full or part employment. When their extent of employment is taken into account, there is very little difference in earnings by school background or achievement. For young people who have completed a tertiary qualification by age 22, who do not continue in study, their qualification level had a small association with higher annual earnings at age 23. This provides an early indication of the effect of qualification completion on earnings.

While higher-qualified young people are much less likely to be NEET, they still make up a significant minority of those who are NEET.

In more recent cohorts (up to 1995), the proportion of young people going overseas has increased, particularly between 19 and 22. Of those staying in New Zealand, more 16 to 19 year olds are staying in education. The proportion who are NEET and/or on benefit has been decreasing.

Introduction

This study explores the education and employment experiences of young people born in 1991. The main purpose of the study is to explore the kinds of employment and labour market measures that can be derived from data in Statistics New Zealand Integrated Data Infrastructure (IDI) and how these vary across groups of young people with different educational experiences and achievement.

The study looks at a set of outcome measures covering migration, employment, earnings and non-participation in employment and education. It uses school performance, engagement and achievement to explore the patterns in the outcome measures. School performance is based on relative achievement levels in the National Certificate of Educational Achievement (NCEA) Level 1. School engagement is based on whether students had ever been stood down, suspended or had serious truancy. Achievement is based on highest level of NCEA award and the highest level of enrolment in tertiary education.

Birth cohort analysis considers all people who are born in the same year and compares or tracks their experiences. In doing so it includes both people who did and did not participate in tertiary education and who did and did not complete qualifications.

The current study provides a different view of employment and income than in the employment outcomes of tertiary education project (EOTE). The latter is focused on measuring employment and earnings of young graduates. This study looks at the experiences of young people as they move from school to tertiary education and employment.

Experiences of the 1991 and 1994 birth cohorts

The young people in the 1991 birth cohort were in senior secondary school when the economy went into decline during the global financial crisis. The economy had been strong during their earlier school years and so they were not necessarily prepared for going into a difficult labour market.

They can be compared with the 1994 cohort, only three years younger, who experienced the downturn while still in early secondary school and had some forewarning that employment would be hard to find when they reached school leaving age.

In spite of these differences in the impact of the economic downturn, young people in the 1991 cohort had higher employment rates than those in the 1994 cohort. This was partly the result of increasing retention in education, but may also have reflected lags in the recovery for the youth labour market.

For the 1991 cohort, the family experiences of the economy varied according to the educational qualifications of the parents. Parents with bachelors degrees and above had a much more stable experience over the period from 1991 to 2013. Parents with no qualifications were highly vulnerable to the economic cycles, in terms of unemployment.

Staying in New Zealand

At age 23, 13% of the 1991 birth cohort who had been in New Zealand at age 15, were overseas. Up to age 23, going overseas is related to school performance and experience.

Those with higher school performance who had not been disengaged from school were more likely to stay in the country. This is likely to be strongly related to their increased opportunity to study in the New Zealand tertiary education system.

Those who had been disengaged at school were more likely to leave the country. Those who had been disengaged at school and had higher school performance were the most likely to be overseas.

Participating in education

School performance and engagement were highly related to continuing at school past age 16 and enrolling in tertiary education. Those with higher school performance who had not been disengaged at school were much more likely to go on to tertiary education than other students.

Most people who studied at degree level had attained NCEA Level 3, and the majority of those who attained NCEA Level 3 went on to study at degree level. Similarly, most people studying in Level 4 to 7 certificates or diplomas had attained at least NCEA Level 2.

Getting a job

Young people with higher school performance who had not been disengaged at school were more likely to be in employment at age 23 (either with or without study) than other young people. They were also more likely to combine education with employment.

Young people with lower school performance who had been disengaged at school were least likely to be in employment at age 23 (either with or without study). Of this group who were in study, a larger proportion did not have employment compared to other groups.

This suggests that having lower performance and/or disengagement at school is associated not just with lower study participation but also with lower employment rates.

A higher proportion of young people with NCEA Level 2 or higher were in employment. The majority of young people in full employment, and no longer in study, had attained at least NCEA Level 2 and/or enrolled in tertiary education at Level 4 and above.

Not in employment, education or training (NEET)

The IDI data provides a number of options for measuring NEET status. These measures take account of employment and education status across each year, which contrasts with the point-in-time estimates from the Household Labour Force Survey.

The broadest measure of NEET status includes all young people who were NEET within a year. Having short spells of being NEET during the year is reasonably common for young people and is only partly related to educational participation and achievement. Similarly, a reasonably large proportion of young people will be on benefit at some stage during the year.

Being on benefit and being NEET involve different, but overlapping, groups of young people. Not all young people who are NEET are on benefit and not all people on benefit are NEET.

Measures that capture whether a young person is long-term NEET[1] or has NEET as main activity[2]during the year are more differentiated by educational participation and achievement. Measuring NEET using these definitions provides a better focus on young people who could be at risk from being NEET. The measures pick up largely the same group of young people. The long-term NEET measure is limited by needing data for the year before and the year after the year of measurement. NEET as main activity can be calculated from data from within each year. This makes the latter a more timely measure.

The strictest definition of NEET is having no education or employment during the year. This measure is highly differentiated by educational participation and achievement. It identifies the group of young people who are likely to be at higher risk of poor outcomes as a result of being NEET.

Being disengaged at school increased the incidence of being NEET, over and above the effect of the level of school performance. Young people with no NCEA or Level 1 only were more likely to be NEET than those with NCEA Level 2 or 3.

While people with higher educational achievement and participation were less likely to be NEET (across all measures), they still made up a significant minority of those who were NEET. So it cannot be assumed that young people who are NEET are only those with poor educational outcomes.

Earning an income

For young people up the age of 23, higher educational participation and achievement are associated with being in employment. However, given the level of employment that a young person is in, there is only a small association between educational participation and achievement and annual earnings.

For young people who have completed a tertiary qualification by age 22, and do not continue in study, their qualification level had a small association with higher annual earnings at age 23. This provides an early indication of the effect of qualification completion on earnings.

Main activity in each year

For analytical purposes it is useful to be able to assign a single activity per year to each person. A measure has been developed that assigns a main activity to each person, based on the activity in which they were involved for the highest number of days in the year.

The main activity measure effectively summarises the observations above and shows the distribution of young people across employment, education and being NEET.

Young people who were disengaged and/or had lower performance were less likely to remain in education and more likely to be employed or NEET.

Those with no school qualifications or NCEA Level 1 only were more likely to be NEET and less likely to be in education or employment at age 23. Similarly, those who had studied at level 4 or higher in tertiary education were more likely to be in employment or education and less likely to be NEET at age 23.

Changes from the 1991 to 1995 birth cohorts

Comparing the 1991 to 1995 cohorts, we can see that there has been a small increase in the proportion who were overseas, particularly from age 19 to 22.

For those who stayed in New Zealand, the proportion in education from 16 to 19 years of age has been increasing. At the same time, the proportion in employment and not in education has decreased.

There has been an overall decrease in the proportion of those who are NEET at each year of age, as there has been in the proportion receiving a welfare benefit.

Comparison with other studies

A review of other related New Zealand studies highlights some general themes that are relevant to the current report:

  • There are strong and persistent relationships between family background and early experiences on later education and employment outcomes.
  • Attaining school qualifications is connected with having more positive outcomes in education and employment. There is also a connection between expectations and aspirations and attainment of qualifications.
  • There are multiple risk factors associated with poor outcomes following school. Studies point towards an accumulation of risk factors influencing negative outcomes, rather than any single factor being deterministic.
  • There are a number of ways of defining being NEET. There is also a diversity of young people who experience being NEET.

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