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Working paper

The Impact of Tertiary Study on the Labour Market Outcomes of Low-qualified School Leavers: An update (WP 18/03)

Issue date: 
Wednesday, 26 September 2018
Status: 
Current
Corporate author: 
View point: 
Publication category: 
JEL classification: 
I26 - Returns to Education
Fiscal year: 
2017/18

Abstract

This paper is an update of a previous study by Treasury (Tumen et al, 2015). It assesses the impacts of post-school education on the labour market outcomes of young people who leave school without the NCEA level 2 qualification. Specifically, it estimates the effects of low-level tertiary study on the employment rates, benefit receipt rates and earnings of young people who left school without completing NCEA level 2 and then enrolled at a tertiary institution while they were aged 15–21. The benefits of the further education are measured by comparing the students’ post-study outcomes with those of matched comparison groups of other young people who also left school without NCEA level 2 but did not undertake any tertiary education.

The current study differs from the previous one in that we allow the students in our study population a longer time period in which to start and complete their tertiary study and track their outcomes for a greater number of years after completion.

The findings are similar to the findings of the previous study. Just over half (51%) of those who enrolled in a level 1–4 certificate programme had achieved a qualification by the time they were 22 years of age. Three years after finishing, the students who completed a qualification were 9.1 percentage points more likely to be employed and 4.8 percentage points less likely to be receiving a benefit than their matched comparisons. Five years after finishing, they were 9.2 percentage points more likely to be employed and 5.9 percentage points less likely to be on a benefit than their matched comparisons.

While completion of a tertiary qualification was associated with positive employment impacts, we find no evidence of positive impacts on participants’ level of earnings, after controlling for their employment status. In addition, the employment benefits of tertiary study were confined to the students who completed a qualification and were not experienced by the 49% who did not.

Disclaimer

The views, opinions, findings and conclusions or recommendations expressed in this Working Paper are strictly those of the author(s). They do not necessarily reflect the views of the New Zealand Treasury, Statistics New Zealand or the New Zealand Government. The New Zealand Treasury and the New Zealand Government take no responsibility for any errors or omissions in, or for the correctness of, the information contained in this Working Paper. The paper is presented not as policy but with a view to inform and stimulate wider debate.

The results in this report are not official statistics – they have been created for research purposes from the Integrated Data Infrastructure (IDI) managed by Statistics New Zealand. Ongoing work within Statistics New Zealand to develop the IDI means it will not be possible to exactly reproduce the data presented here.

Access to the anonymised data used in this study was provided by Statistics New Zealand in accordance with security and confidentiality provisions of the Statistics Act 1975. Only people authorised by the Statistics Act 1975 are allowed to see data about a particular person, household, business or organisation. The results in this report have been confidentialised to protect these groups from identification.

Careful consideration has been given to the privacy, security and confidentiality issues associated with using administrative and survey data in the IDI. Further detail can be found in the privacy impact assessment for the Integrated Data Infrastructure available from Statistics New Zealand.

The results are based in part on tax data supplied by Inland Revenue to Statistics New Zealand under the Tax Administration Act 1994. These tax data must be used only for statistical purposes, and no individual information may be published or disclosed in any other form or provided to Inland Revenue for administrative or regulatory purposes.

Any person who has had access to the unit-record data has certified that they have been shown, have read and have understood section 81 of the Tax Administration Act 1994, which relates to secrecy. Any discussion of data limitations or weaknesses is in the context of using the IDI for statistical purposes and is not related to the data’s ability to support Inland Revenue’s core operational requirements.

Last updated: 
Wednesday, 26 September 2018