Working paper

Private and Public Returns to Investments in Secondary and Higher Education in New Zealand Over Time: 1981-1996 (WP 99/02)

Author: Sholeh Maani


With significant increases in the demand for new skills and participation in higher education in New Zealand since the 1980s, and the introduction of economic reforms toward market liberalisation since the mid 1980s, an examination of income returns to investments in higher education has been of significant interest. This study utilises micro level data from the New Zealand Census for the years 1996, 1991, 1986 and 1981 to examine the market returns to post-compulsory secondary and tertiary education for males and females. Internal rate of return estimations of private and public returns to education, and econometric modelling with formal stability tests of changes in returns over time are employed to examine the magnitude and changes in returns to higher education over the fifteen year period. The period of the study is of interest, spanning the period before and after the introduction of the first set of reforms in 1984, and labour market reforms in 1991. The results show strong support for an increase in the returns to tertiary education in the 1981-1991 period, and a stabilisation of results for males and a relative decline in the returns for females since 1991.