Better Public Services: Boosting skills and employment [archived]

Result 6: Increase the proportion of 25 - 34 year olds with advanced trade qualifications, diplomas and degrees (at Level 4 or above)

Why is this important for New Zealand?

We need to increase the level of skills in our workforce to support New Zealand’s economic growth. A higher skilled workforce supports better innovation and productivity.

Individuals with higher qualifications tend to have better economic and social outcomes than those with low qualifications. People who gain higher level qualifications, especially at degree level and above, are more likely to be employed, have higher earnings, and less likely to be receiving a benefit.

How will we know we are achieving this result?

The Government's target relates to the percentage of 25–34-year-olds who have a qualification at Level 4 or above. In 2012, the Government set a target that 55% of 25-34 year-olds would hold a qualification of level 4 or above in 2017. In 2014, the Government updated the target to be 60% of 25-34-year-olds in 2018. The target was revised as it was expected that the 55% target would be met before 2017, given recent trends in the measure and for other positive trends in tertiary completion rates.

The annual average to June 2016 was 56.5%, up from 55.8% for the year to March 2016, and 53.5% for the year to June 2015. The annual average to June 2016 is the highest result reported to date, and is the second quarter in a row that the result has exceeded 55%.

You can see the datasets at data.govt.nz.

Progress towards the Result Area 6 target is measured by the Household Labour Force Survey (HLFS) and is reported as a rolling annual average each quarter. Quarterly results in the HLFS tend to fluctuate for the target, with small sample sizes for 25–34-year-olds. Annual average data provides a more robust measure.

Growth in this indicator reflects the ability of New Zealand's education system to develop the skills and qualifications of our domestic population, our ability to retain domestic talent, and our success in attracting highly skilled and talented people to New Zealand’s workforce.

Monitoring the performance of the tertiary education system, in terms of higher participation and completion rates for young people helps track progress towards the target.

The proportion of 19 year olds who were, or had been, enrolled in a qualification at Level 4 or above, was steady at 47% over 2010 to 2015.

There have been improvements in qualification completion rates at Level 4 and above for 22-year-olds. The proportion of 22-year-olds completing Level 4 or above qualifications increased from 33% in 2010 to 36% in 2014. These completion rates indicate that by 2018, the proportion of skilled graduates from the New Zealand tertiary system will have increased and will provide a solid base for meeting the target. However, the level of skills within New Zealand’s workforce is also influenced by migration trends.

Changes to the skill mix of inward and outward migration tend to have different impacts on the proportion with Level 4 or above qualifications. Overall, those aged 25–34-years immigrating to New Zealand add to the skilled workforce as they have higher rates of qualifications at Level 4 or above than the domestic population. The outward migration of New Zealand graduates decreases New Zealand’s skilled workforce.

In the year to June 2016, the net migration rate for those aged 25-34 year olds was 2.7%, up from 2.3% in year to June 2015. The net migration rate relates to permanent and long term arrivals and departures for more than 12 months, and excludes those on a student visa. A strengthening economy may be helping retain and attract skilled workers.

What are we doing to achieve this result?

To achieve this target, it is necessary to identify opportunities for increasing enrolments within the tertiary sector, continue to improve quality provision, completion rates, and the tertiary system performance. This will draw together a range of existing work by the Ministry of Education, the Tertiary Education Commission and the wider tertiary sector, and will require ongoing collaboration.

Increase participation in higher-level study

Education provision needs to have progression pathways linked to industry needs that support more young people to transition into study at Level 4 or above, and into careers. We are improving pathways for progression, by:

• Extending Vocational Pathways – developed with industry to show students how their learning relates to career options – to Level 3 and above. This will help students transition and navigate higher level study that relates to the six sectors of the economy.
• Additional New Zealand Apprentices – funding for an additional 5,500 apprentices by 2020 was announced in the 2016 Budget. Greater demand for apprentices has been driven by a strengthening labour market and improvements in school achievement.
• Supporting schools, tertiary providers and industry training organisations to collaborate so that senior secondary school students can enrol part-time in school and part-time in tertiary education or industry training. This allows students to explore career options and get a head start on a vocational qualification, alongside completion of NCEA Level 2 or 3. From 2017, the Dual Pathways pilot will provide additional funding to support these programmes.
• Expanding fees-free foundation education to students of all ages from 2017. From 2013, fees-free foundation education provision has been expanding, and was available to learners under 25 years from 2014. Basic foundation skills provide options for people to go on to further study or training, including towards qualifications at Level 4 or higher, and have better employment outcomes.
• Extending the education and Pasifika Trades Training (MPTT) initiative from 1,200 allocated places in 2015 to 2,400 places in 2016, with further growth planned in 2017. MPTT gives more Basic and Pasifika young people the opportunity to complete foundation and pre-apprenticeship education so that they may move into employment and further training through New Zealand Apprenticeships.
• Increasing funding for, and promotion of, engineering to support 500 additional graduates per year from 2017. Between 2008 and 2014, the number of domestic students enrolled in engineering and related technologies at bachelors or higher level of study increased by 38 per cent to 11,055. The number of bachelors or higher engineering and related technology graduates increased by 480 (31 per cent) over the same period.

Improving quality and achievement at Level 4 or higher-study

There is a strong focus on improving the overall quality of higher level tertiary education and increasing achievement at Level 4 or higher through tertiary provision at providers and through industry training. There has been an increase in overall course and qualification completion rates in provider-based study, and in credit completion rates for industry training.

Improvements in the industry training system, following the policy review of 2012/2013, and an improving labour market, have led to an increase in the take-up of apprenticeships. In 2015 the number of people in apprenticeship training was up by 12% on 2013.

Strengthening information available for students

New initiatives have focussed on supporting students to make more informed study and career decisions by providing accessible information on the employment and earnings outcomes of study choices. Innovative ways to engage with students to provide information on study options and careers include:

• the Ministry of Business, Innovation and Employment's Occupation Outlook report and smartphone app showing the career prospects for 50 occupations from the six Vocational Pathways
• online tools that enable students to compare the study options and careers by showing comparative information on the employment outcomes of tertiary study
• developing more information on whether qualifications fulfil labour market needs from the perspectives of graduates and employers through Rate My Qualification.
• the new FindMyPath tool highlights the Level 3 to 7 qualifications that are valued by different industries. It shows young people how to pursue particular pathways and where those pathways can take them. It builds on the Vocational Pathways profile builder, which helps students doing NCEA see what learning to pursue so their school achievement is valued in the world of work.

Government is also strengthening the careers information and education available to students. An effective careers system is focused on what students need and provides high quality and easy-to-find information and advice in one place. High quality careers education needs to show students how their learning links to work and study options.

The Government is proposing to transfer Careers New Zealand's functions into the TEC. This would make use of the TEC's ability to work with tertiary providers and employers so they can provide better careers information to schools, and coordinate with schools and employers on the skill needs of the labour market. Improving connections between educators and employers will support students to successfully transition to further study and employment.

Case Studies Result 6