Earnings premiums by qualification level

Why This Is Important

How much people earn as a result of their investment in a tertiary education is an important indicator because the real value of tertiary education lies in the extent to which it helps people achieve satisfying lives and productive careers.

Gaining a tertiary education costs a lot, financially and in time.  People need to be satisfied that the investment in study is likely to have long-term benefits.

The government is also concerned with how much people earn as it makes a very large investment in tertiary education each year – funding tertiary education providers, providing subsidised student loans and granting student allowances. A major purpose of the government's investment is to help improve the New Zealand economy and society by raising the level of skill in the population – which helps make our society more productive, contributes to the creation of wealth and leads to better social outcomes.

Indicator Description

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Numerator: (Data Source: Statistics New Zealand, Household Labour Force Survey (June Quarter))

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Median hourly, or weekly, earnings of New Zealanders by qualification level.

Denominator: (Data Source: Statistics New Zealand, Household Labour Force Survey (June Quarter))

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Median hourly, or weekly, earnings of New Zealanders without a qualification.

Interpretation Issues

The median hourly earnings used to calculate the earnings premiums in this indicator are based on the usual weekly pay from people's main job.The median weekly earnings used to calculate the earnings premiums in this indicator are based on the weekly pay information from all jobs held by people.

Movements in relative earnings may be a reflection of change in the labour market value of particular skills and levels of education, as well as change in the skill demands of the overall economy. There are also consistent differences in labour market conditions among genders and age cohorts.  The labour market effects of education need to be considered not just at one point in time, but over the whole lifecycle, and alongside other factors which impact on employment.

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