Part Five The Level and Distribution of Human Capital in New Zealand
Comparisons with other OECD countries may help guide New Zealand’s policy effort
Comparisons across countries of current levels of human capital, and measures of its quality and distribution, may be useful to guide further policy effort to increase growth and raise well-being. Trends over time, and comparisons with other developed (OECD) countries[43] may help identify areas where progress is slow, and where our patterns diverge most from those of successful countries.
Unfortunately, the measures of human capital that allow reliable comparison across countries and across time are limited in scope. They do not, for instance, usually cover managerial and entrepreneurial skills, or “softer” skills such as capacity for teamwork, problem solving and adaptability, that are likely also to be important for labour market success. In addition, it is important to note that New Zealand’s economy has a different structure to other OECD countries, has followed a different historical path and has social and cultural differences. All these will probably be important for the types of human capital that are at present most relevant to growth and well-being here. International comparisons are useful, but should be tempered by these considerations.
The following discussion selects three dimensions by which to compare human capital in New Zealand to other OECD countries:
- Average education attainment in the population, and participation in post-compulsory education.
- The quality of achievement.
- The distribution of achievement.
Average education attainment, and participation in post-compulsory education
New Zealand has high average years of education in the working age population
| 1971 | 1998 | |||
|---|---|---|---|---|
| Years | Rank (of 21) | Years | Rank (of 21) | |
| Australia | 11.1 | 3 | 12.3 | 5 |
| Canada | 11.4 | 2 | 12.9 | 2 |
| Germany | 9.7 | 9 | 13.5 | 1 |
| New Zealand | 10.3 | 5 | 11.8 | 9 |
| Portugal | 6.5 | 20 | 7.7 | 21 |
| Spain | 5.8 | 21 | 8.7 | 20 |
| U.K. | 9.2 | 11 | 11.9 | 8 |
| U.S. | 11.6 | 1 | 12.7 | 4 |
Source: OECD (2000b)[44]
… but its rank has slipped over the last 30 years
The increase in average years of education between 1971 and 1998 ranged from 1.1 years (the United States) to 3.8 (Germany). New Zealand, at 1.5, had the fourth smallest increase (after Portugal and Australia) followed closely by Canada and Denmark. Overall there appears to be a tendency for countries with initially high average years of education to have low growth in this variable.
Notes
- [43]In the material that follows, a range of methods of comparison are used, including New Zealand’s overall ranking amongst participating countries, and mean scores compared with selected countries. Comparator countries are selected partly because of their similar histories of education provision (the United Kingdom, Australia, Canada) or because they indicate the range of outcomes.
- [44]Human capital is measured “by estimates of the average number of years of education among the working-age population, based on figures on educational attainment and assumptions about how many years of education a particular level of education represents.” While this is “only a proxy” … ”it is an improvement with respect to the measures generally used in the literature. It relies on OECD data on education attainment and the revised Barro-Lee (1996) dataset based on the work of De La Fuente and Domenech (2000)”.
