3 A framework for dissecting gross earnings
The dissection of New Zealand's measured returns above suggests that one component of the index is primarily responsible for our low rank: the gross earnings benefit for tertiary education is extremely low compared to other OECD nations.
We use a simple schematic diagram of the influences upon tertiary returns (Figure 4) to understand the differences between New Zealand's gross earnings benefit and the OECD average. The form of the diagram draws on the work of Dalziel (2010a, 2010b) and adds the labour market, endowments and policy settings. On the supply side it draws on the idea of education as an investment in one's human capital, which graduates then earn a return on through their working lives.
- Figure 4 - Influences on tertiary returns
