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

Tertiary education growth has been strong but unbalanced

High participation in tertiary education is raising overall workforce qualifications

In contrast to our low youth participation rates, participation in tertiary education by older New Zealanders has grown significantly, and is well above the OECD average.

Our tertiary education graduation rates (annual graduates as a percentage of the population) are amongst the highest in the OECD. The growth in tertiary education over the last two decades is now being reflected in overall working-age qualifications. In 2006, 19.3% of adults had university degrees, an increase from 11.5% in 1997.

Figure 9: Education enrolment rates of 20-29 year olds in the OECD
Figure 9: Education enrolment rates of 20-29 year olds in the OECD.
Figure 10: Increasing qualifications levels in the adult population
Figure 10: Increasing qualifications levels in the adult population.
Source: Household Labour Force Survey
Figure 11: Qualifications of the adult population across the OECD
Figure 11: Qualifications of the adult population across the OECD.

Formal work-based education and training has also increased (by approximately 75% from 2001 to 2006), with 190,000 participants in industry training and modern apprenticeships in 2006 (8.4% of the workforce) (Ministry of Education, 2007).

Growth has been almost entirely in lower-level qualifications

From 1999-2006, almost all the growth in tertiary education participation was in sub-degree certificates and diplomas. This included a large increase in participation for Māori adults, and the growth of industry-linked training. In contrast, there was no significant growth in degree-level completions, despite a general pattern of higher rates of return on degree-level study.

Figure 12: Recent growth has been in lower-level tertiary qualifications
Figure 12: Recent growth has been in lower-level tertiary qualifications.
Not all the growth has been well aligned with firms’ skills demands

The recent tertiary education reforms were initiated in response to concerns by government, employers, tertiary education providers and other stakeholders about these unbalanced patterns of growth, the quality and relevance of some provision to national economic and social goals, and the sustainability of some providers.

Poor completion rates and low income premiums for some qualifications (especially at the sub-degree level) provide some evidence to support this concern, as does the persistence of skills shortages in some sectors and regions.

Poor foundation skills are a barrier for many adults

Fewer working-age adults are at the lowest levels of literacy than in 1997

The Adult Literacy and Life Skills Survey (ALL), conducted in New Zealand in 2006, provides a direct measure of the working-age population’s skills in prose and document literacy, numeracy and problem solving. The literacy results can be compared with those from the 1996 International Adult Literacy Study (IALS). Only limited international comparisons are available at present.

NZ adults’ foundation skills match those in Australia and Canada

Key findings include (Satherley, Lawes and Sok, 2008):

  • New Zealanders’ overall literacy improved significantly in the 10 years from 1996. The proportion of the population with the lowest levels of literacy fell from 21% to 14% for document literacy, and from 18% to 13% for prose literacy.
  • Similar literacy trends were seen in Australia and Canada, but New Zealand saw greater improvement in document literacy.
  • Much of this improvement is likely due to the “ageing out” of the 55-64-year old cohort of the 1996 IALS study – a generation with significantly lower levels of school completion and other qualifications.
  • Overall, New Zealand’s numeracy and problem solving results are nearly indistinguishable from those of Canada and Australia, and generally above those of the USA.
Figure 13: Adult Literacy and Life Skills survey – New Zealand 2006

Figure 13: Adult Literacy and Life Skills survey – New Zealand 2006.

Source: Satherley, Lawes and Sok (2006)

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