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The Herald on Sunday editorial

Herald on Sunday editorial: Our degrees are not paying

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Photo / Thinkstock
Photo / Thinkstock

League tables might not be welcome as a measure of schools' performance but the OECD periodically publishes a feast of them that are used by its member nations as a reliable comparison of their educational results. On one of those tables, New Zealand's efforts in tertiary education, have rated surprisingly badly.

This country is at the bottom of the table for salary gains from tertiary qualifications. On average, a person with a degree from our universities does not earn much more in a lifetime than someone without one. The net value of a man's tertiary education here is just $63,000 over a working life, compared with $395,000 in the United States. For a Kiwi woman, it's $38,000.

That result will dismay those who raised tertiary fee levels in the 1990s to 25 per cent of course costs based on the contention that the private gain from tertiary education is greater than the return to the public. The student contribution can, of course, be covered by loans now interest-free and repayable only when the borrower reaches an earning threshold, but students have been given to expect a better income for their efforts.

The taxpayer should be no less disappointed by this result since the bulk of tertiary costs are met from the public purse, either as grants to the institutions or as foregone student loan interest. The graduates' consequent earnings and the taxes on them are the main measure of the public benefit, too.

Why are we getting such a low return from our investment in higher education? University vice chancellors and others will offer answers, including no doubt the accusation that the Government is not investing nearly enough in their institutions. At the last survey, OECD nations spent $16,459 annually on each tertiary student. New Zealand spent $12,000, much less than Australia ($19,000), Canada and most countries we would like to compare with.

So there may be a case for more public investment when economic growth permits. We are spending less than the OECD average on each person's education at primary, secondary and tertiary level, but our education budget is still a large proportion of our GDP, second only to that of Iceland.

In seeking the reason for our poor salary return, the quality of the education provided deserves attention, too. Workforce training has become heavily institutionalised in recent decades.

On-the-job apprenticeships and cadetships have largely given way to tertiary qualifications acquired in full-time study.

The length of the courses, often three or four years, sometimes seems excessive and the per-student funding formula is often blamed for "dumbing down" courses and degree standards. If the lectures are so easy that almost anybody can pass, it could explain the fact that graduates are earning not much more than those with no degree.

Yet the league table shows we are only average in the proportion of school leavers who go on to higher education. International students and mature students also exaggerate our entry rate, and those of Britain and Australia. When they are excluded, Australia slips from first to seventh on the table, New Zealand from fifth to 12th.

Perhaps most disturbing for our efforts to provide equal opportunity for all, we do not score at all highly for intergenerational mobility. A young New Zealander whose parents did not go to university is still not very likely to do so. Young men, in particular, are unlikely to exceed their parents' education.

There is nothing like a league table to puncture complacency. Crude comparisons they may be but they confront us with the need to explain our failings, or change. The challenge is ours.

- Herald on Sunday

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