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Qualifications, Employment and the Value of Human Capital, 1986-2001 - WP 03/35

Publication Details

  • Qualifications, Employment and the Value of Human Capital, 1986-2001
  • Published: Dec 2003
  • Status: Current
  • Authors: Hyslop, Dean; Maré, David (Dave) C; Timmins, Jason
  • JEL Classification: J21; J24
  • Hard copy: Available in HTML and PDF formats only.

Qualifications, Employment and the Value of Human Capital, 1986-2001

New Zealand Treasury Working Paper 03/35

Published December 2003

Authors: Dean Hyslop, Dave Maré and Jason Timmins


This paper summarises the changing nature of qualifications across the working age population in New Zealand over the period from 1986 to 2001, and investigates the relationships between the changing qualification distribution and employment and income. First, the results confirm that there was a general upskilling of the population, as measured by formal educational qualifications. Second, we examine patterns of qualification change and employment growth measured in job groups, and find that the upskilling of the population occurred across a wide range of job-groups. Also, although the results show the employment growth was strongest in job-groups with high initial levels of skilled workers, employment growth is only weakly related to upskilling. Third, we decompose the change in the value of human capital into contributions due to changes in the qualification mix, changes in the (economic) returns to qualifications, and the interaction between these two factors. The value of human capital increased by 20% over the period: about 75% of this increase can be attributed to increasing incomes holding constant the mix of qualifications, 15-20% to an increasing skill mix, and the residual to interaction effects.


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Table of Contents

List of Tables

List of Figures

1 Introduction

2 Data

3  Changing educational qualifications and skills

4  Employment growth and the role of qualifications

5  Changes in the value of human capital, 1986–2001

6  Conclusion





twp03-35.pdf (1022 KB) pp. 1–66

List of Tables

List of Figures


This paper was commissioned and funded as part of Treasury’s Economic Transformation project.

We thank Ron Crawford, Geoff Lewis, Steven Stillman, and participants at a Treasury seminar on an earlier version of this paper for comments and discussions. The analysis presented in this paper is based on confidentialised Census data provided by Statistics New Zealand.


The views expressed in this Working Paper are those of the author(s) and do not necessarily reflect the views of the New Zealand Treasury. The paper is presented not as policy, but with a view to inform and stimulate wider debate.

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