Study choices affect post-study earnings

Tertiary Education, Skills and Employment Minister Steven Joyce has welcomed the release of new data that compares what students earn after studying different subjects and at different levels in New Zealand.

The data is from the new Ministry of Education report, Moving on up - What young people earn after their tertiary education, andwas gathered by matching information from Inland Revenue with tertiary qualifications data.

“The data highlights the large variation in earning potential for different types of graduates, with those studying in in-demand areas earning the most. This report will be useful for students of all ages considering their career options,” Mr Joyce says.

“For example, the data shows the top earners with a bachelors degree are graduates in medicine, earning around $110,000 per year five years after leaving study. This is nearly three times as much as a performing arts graduate,” Mr Joyce says.

“Civil engineering graduates also obtain a premium in the job market, earning about $67,653 a year, 48% more than language and literature or sport and recreation graduates.”

“It’s very clear that study at higher levels improves your career prospects. I encourage young people to take every advantage they can of their tertiary study opportunities to obtain the skills to compete in the modern world.”

The report also shows the advantages for people of completing study at higher levels in terms of both their earnings and their employment status.

For example:

·      Five years after finishing study, median earnings for young bachelors graduates are 53% higher than the national median wage, Masters graduates are 86% higher, and those that complete Doctorates earn on average more than double (121% more than) the median wage 

·      Those studying at higher levels are very unlikely to be on a benefit after study.  For example, the benefit rate for bachelors graduates five years after study is 2%; while for those who complete Certificates at Levels 1 to 3 it is 10%.

"Careers New Zealand is releasing a new online tool tomorrow that allows students to compare earnings by qualification and field of study,” Mr Joyce. “The tool will be very useful in considering their study options."

This report on post-study earnings will complement a new report from the Ministry of Business, Innovation and Employment on the demand outlook for major occupations in New Zealand’s labour force, due out in February.

“The choice of study is very much a decision for students and their families. The Government has committed to provide better information to assist in making those choices, for the benefit of students and for the very significant investment taxpayers make in tertiary education.

“Over the course of 2013, I will be asking government agencies to dig further into the data and produce more information that will help young people make more informed choices about their careers.”

The Ministry of Education report is available on the Education Counts website:  http://www.educationcounts.govt.nz/publications/tertiary_education/moving-on-up-what-young-people-earn-after-their-tertiary-education

The Compare study options tool will be available today on Careers New Zealand website: www.careers.govt.nz/compare-study-options

Notes:

The key findings of the Moving On Up: What young people earn after their tertiary education and two sample tables from the report are attached.

All statistics related to young graduates living in New Zealand. The earnings data are not adjusted for hours worked, so occupants with a high numbers of part-time workers may appear to be lower-paid that is actually the case.

Key findings from Moving On Up: What young people earn after their tertiary education

·         Earnings increase with the level of qualification completed. Five years after finishing study, the median earnings of young people who had completed a bachelors degree was 53% above the national median earnings and 46% above the median for young people who had gained a certificate at levels 1-3.

·         Employment rates increase with level of qualification gained. For example, in the first year after study, 56% of young bachelors graduates were in employment and 38% were in further study.  With young people who had completed a level 1-3 certificate, 37% were in employment and 48% were taking more study.

·         Very few young people who complete a qualification at diploma level or above are on a benefit in the first five years after study.  The benefit rate is 4% for diploma graduates and 2% at bachelors level.  But it is around 10% for those who graduated with certificates at levels 1-3.

·         Young graduates with bachelors degrees in medicine earn the most one, two and five years after studying. The median income for medical graduates is over $110,000 after five years.

·         Dental studies and pharmacy bachelors graduates earn the second highest incomes among young bachelors graduates after five years, with median incomes of over $76,100 and $75,100.

·         Engineering graduates with an honours degree have median earnings of $65,000 five years after study, compared with $58,300 for a bachelors degree without honours.

Sample tables from Moving On Up: What young people earn after their tertiary education

Median and quartile annual earnings of young domestic bachelors degree graduates, one, two and five years after study by broad field of study,

Source: Statistics New Zealand, Integrated Data Infrastructure, Ministry of Education interpretation.

Median earnings for young domestic bachelors graduates, one two and five years after study, by narrow field of study:

Source: Statistics New Zealand, Integrated Data Infrastructure, Ministry of Education interpretation.

Median annual earnings of young domestic, one, two and five years after study, as a percentage of the national median earnings by qualification level.

Source: Statistics New Zealand, Integrated Data Infrastructure, Ministry of Education interpretation. Refer to Chapter 12 for full notes.

More about Moving On Up: What young people earn after their tertiary education – Notes about the data

The Ministry of Education is using data from Statistics New Zealand’s Integrated Data Infrastructure (IDI) prototype to work out graduates’ destinations and their earnings. Statistics New Zealand will deliver the IDI in 2013 and this will replace the IDI prototype.

The IDI is a statistics and research dataset managed by Statistics New Zealand.  Statistics New Zealand has set up the IDI in consultation with the Privacy Commissioner so that it complies with the highest standards of security and confidentiality.

The IDI links Ministry of Education secondary and tertiary education data, Inland Revenue employment, earnings and student loans and allowances, Ministry of Business, Innovation and Employment migrant and international movements data, Ministry of Social Development benefit and student loans and allowances data, Statistics New Zealand Longitudinal Business database, New Zealand Household Labour Force Survey and New Zealand Income Survey.

The IDI is refreshed periodically so researchers can trace an individual’s movement from education to employment to overseas and back again over a number of years.

More information on IDI can be found at:

http://www.stats.govt.nz/browse_for_stats/snapshots-of-nz/integrated-data-infrastructure.aspx

Moving On Up: What young people earn after their tertiary education

This report looks at graduates’ destinations and their earnings in the first five years following graduation. It:

·         looks at domestic students only

·         gives data on young graduates only

·         looks at outcomes by field of study and qualification level.

The information is available in a report on www.educationcounts.govt.nz and is also accessible via the web-based Compare study options tool on the Careers New Zealand website www.careers.govt.nz.

Note: all statistics relate to young graduates living in New Zealand. The earnings data are not adjusted for hours worked, so occupations with a high number of part-time workers may appear to be lower-paid than is actually the case.

The status of this data

This report was undertaken while the authors were on secondment to Statistics New Zealand. The results in this report are not official statistics, they have been created for research purposes from the Integrated Data Infrastructure (IDI) prototype managed by Statistics New Zealand. On-going work within Statistics New Zealand to develop the IDI means it will not be possible to exactly reproduce the data presented here.

The opinions, findings, recommendations and conclusions expressed in this report are those of the author(s). Statistics New Zealand and the Ministry of Education take no responsibility for any omissions or errors in the information contained here.

Access to the 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, business or organisation. The results in this report have been confidentialised to protect individual people and businesses from identification.

Careful consideration has been given to the privacy, security and confidentiality issues associated with using administrative data in the IDI prototype. Further detail can be found in the Privacy impact assessment for the Integrated Data Infrastructure available from www.stats.govt.nz.

The results are based in part on tax data supplied by Inland Revenue to Statistics New Zealand under the Tax Administration Act 1994. This 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 prototype for statistical purposes, and is not related to the data's ability to support Inland Revenue's core operational requirements.