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Working Smarter: Driving Productivity Growth Through Skills - TPRP 08/06

New Zealand's skills profile

Looking across all measures, New Zealand’s skills levels are good and improving. This should lead to an increase in measured labour quality in the workforce and boost labour productivity.

On average, and for top talent, New Zealand compares well and trends are positive

Our students have, on average, very high levels of achievement at age 15, and the percentage of students achieving at the highest level at this age near the top of the OECD. This offers the prospect of very high quality flows of skilled young workers into New Zealand’s future workforce.

But problems include relatively poor skills in the growing Māori and Pacific  communities, and low youth participation rates

This prospect is clouded, however, by some particular areas of poor performance. First, our high average achievement levels mask a relatively large “tail” of low achievement in which our growing Māori and Pasifika communities are over-represented. Second, we have a very low rate of retention of youth in education – despite improvements, a large proportion of students still leave school without senior secondary school qualifications, and participation in education by those aged 15-19 is amongst the lowest in the OECD.

High tertiary education participation has lifted workforce skills, but many workers still have low foundation skills

Within the current working-age population, participation in education and training, including formal on-the-job training, is high. Increases in tertiary education over the last 20 years are changing the structure and composition of the adult workforce, but we are still only around the average in the OECD for adult qualifications. A large minority of the current workforce has low foundation skills that are an impediment to further skills development and productivity growth. Recent growth in tertiary education has been concentrated in sub-degree level qualifications, and a rebalancing of participation towards younger students and higher level qualifications study would likely deliver greater productivity gains in the long term.

High average achievement in school, but wide disparities

New Zealand’s 15 year-olds perform well by international standards...

The OECD’s Progress in International Student Achievement (PISA) study measures 15-year olds’ achievement in reading, mathematics and scientific literacy in 57 countries.

on average...
  • New Zealand students’ average score is near the top of the OECD in all three subject areas – only three OECD countries do significantly better in mathematics, only two do better in reading, and only one does better in science;
and for top achievers…
  • New Zealand has amongst the highest proportion of students achieving at the highest levels measured in PISA. For example, in 2006, New Zealand had nearly twice the OECD’s average percentage scoring in the top levels (Levels 6&7) in science literacy.
  • Ethnic disparities are significant. In PISA 2006, the OECD average score in reading was 492. New Zealand, average reading scores were: 542 for Pākehā-European students; 528 for Asians; 477 for Māori; and 461 for Pacific students.
but ethnic and socio-economic disparities are large
  • New Zealand has one of the largest spreads of student achievement, and achievement is more closely correlated with students’ socio-economic status than in many OECD countries.
Table 2: Reading, maths and science achievement at age 15
Table 2: Reading, maths and science achievement at age 15.

The wide variance in achievement, and disparities linked to ethnicity and socio-economic status, appear in the earliest assessments of primary school pupils and persist thereafter.

Significant improvements in achievement have been observed in Year 5 students’ achievement in mathematics. New Zealand children’s achievement is near the average for the OECD countries that participated in the Trends in International Mathematics and Science Study (1994, 1998 and 2002). Over this period, New Zealand students’ performance improved significantly across the board, with the biggest improvements for the bottom quartile.

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