Part Six Opportunities To Improve Well-Being Through Human Capital Policies in New Zealand
Raising skills in the bottom of the distribution of skills provides the greatest opportunity to improve well-being in New Zealand
The argument in Parts one to five lead to the conclusion that the greatest opportunity for improving well-being in New Zealand, using human capital policies, is to focus on raising achievement in the bottom of the distribution of skills – particularly the bottom quintile.
Early interventions are the most cost-effective in the long run
There are two issues here – how to reduce the numbers of young people leaving education without adequate skills to secure stable employment, and how to improve skills for those already in the workforce. Because of the cumulative nature of educational investments, early interventions in pre-school and primary education are likely to be most cost-effective in the long run.
The period from birth (even pre-birth) to school age is a critical development phase with life-long effects on well-being. Intensive early childhood interventions can be effective in improving a range of both short and long term outcomes for disadvantaged children[69]. However, such interventions are relatively expensive (compared to regular early childhood education), targeting instruments are not perfect, and it may be difficult to engage the most disadvantaged families. Therefore interventions need to be carefully designed in terms of the age of the child, their targeting on risk factors and their mix of child-focussed and parent-focussed elements. Intensive very early interventions for children most at risk may be important, given rapid brain development that takes place in these years.
Good quality standard early childhood education also appears to have a beneficial effect, in particular for disadvantaged children, but again it is difficult to ensure that the most disadvantaged children access provision. In addition, there is evidence that some of the benefits of pre-school interventions – particularly higher cognitive skills – are lost, if primary education is of insufficient quality[70]. Primary schooling is thus of key importance in addressing the risk of low achievement.
Of particular importance are foundation skills in literacy and numeracy that provide the platform for later learning both in school and the workforce. Such skills have been shown to have a strong link with labour market success independent of levels of education (OECD and Statistics Canada 1997; Hanushek and Kimko, 2000; Maré and Chapple, 2000 for New Zealand).
Basic literacy and numeracy are particularly important …
Recent research in the United Kingdom (Machin et al. 2001) suggests that raising numeracy skills is particularly important for improving labour market outcomes for those in the lower part of the distribution of skills (while improving literacy has a stronger effect for those who are already well skilled). The research also suggests that basic literacy and numeracy have a more important and more robust effect than a range of other “soft skills” and attitudes on labour market outcomes.
