publication . Research . Preprint . Report . 2013

Private Returns to Tertiary Education - How Does New Zealand Compare to the OECD?

Sholeh Maani;
Open Access English
  • Published: 01 Jul 2013
  • Publisher: Wellington: New Zealand Government, The Treasury
Abstract
How do private returns to tertiary education in New Zealand compare internationally? According to the latest OECD measures, the private rate of return for New Zealand is 8.9%, compared to an OECD average of 12.4%, placing New Zealand toward the bottom of the OECD ranking. The aim of this study is to better understand the reasons for that gap and determine whether the low returns could be considered as problems amenable to policy interventions. We identify a number of measurement issues with the OECD standardisation. We develop a decomposition approach and provide a series of decompositions of the New Zealand-OECD gap. Our analysis shows that about half of the ga...
Subjects
free text keywords: J24, J31, J38, B49, Private Returns, Higher Education, Earnings, OECD Index, Decomposition, Measurement Issues, Private Returns; Higher Education; Earnings; OECD Index; Decomposition, Measurement Issues, ddc:330, jel:J24, jel:J31, jel:J38, jel:B49

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22 This measure includes residential housing and is not necessarily representative of the productive capital available to firms. However it is useful for triangulating results from other measures of capital inputs to production - all of which present difficult measurement issues requiring judgement and assumptions.

23 Dupuy, Max and James Beard (2008), Investment, Productivity and the Cost of Capital: Understanding New Zealand's 'Capital Shallowness (TPRP 08/03) - The Treasury - New Zealand; Schreyer (2007), International Comparisons of Levels of Capital Input and Multi-Factor Productivity; Mason and Osborne (2007), Productivity, Capital-intensity and Labour Quality at Sector Level in New Zealand and the UK.

56 Shangqin, McCann and Oxley (2009), Innovation in New Zealand: Issues on Firm Size, Local Market Size and Economic Geography, for example, note the effect of market size and distance on innovation.

57 Crawford, Ron, Richard Fabling, Nick Bonner and Arthur Grimes (2007), National R&D and Patenting.

58 Oi, Walter Y and Todd L Idson (1999), Firm size and wages in Orley Ashenfelter and Richard Layard eds Handbook of Labor Economics.

59 Ibid.

60 Black, Noel, and Wang (1999), On-the-Job Training, Establishment Size, and Firm Size.

61 Agell, Jonas (2009), Why Are Small Firms Different?.

62 Cameron, Linda, Bryan Chapple, Nick Davis (2007), Artemisia Kousis, and Geoff Lewis New Zealand Financial Markets, Saving and Investment.

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publication . Research . Preprint . Report . 2013

Private Returns to Tertiary Education - How Does New Zealand Compare to the OECD?

Sholeh Maani;