One of the main reasons people do tertiary education is to gain qualifications to help them find a satisfying career. Ask young people (and their parents) why they are interested in tertiary education and employment is likely to figure high in the responses. And all the data shows that holding a higher-level qualification is a protection against the risk of unemployment and leads to higher earnings.

Of course, getting a job is not the sole reason for doing tertiary education. Some people want to learn because they love learning.  People who have had the experience of higher education tend to have better health and are less likely to get involved in crime and have better social outcomes.  But employment is the key to those better social outcomes – or, rather, unemployment is what leads to really negative outcomes. So, a major part of the value of tertiary education is its employment outcomes.  For many people, the true value of the investment of time and money in their education is what happens to them after they have finished.

Measuring employment outcomes…

So measuring those outcomes is a critically important part of assessing the performance of the system.

Since 2009, NZ government agencies have been using anonymised linked administrative data to do this, in a massive Statistics NZ dataset that holds education records, tax records, benefits data and border crossing data.  Looking at this data over time, it’s possible to see whether an individual is in work, in further study, overseas or on a benefit in each of the ten years after leaving study.  That’s a precise, comprehensive way of looking at which qualifications are leading to good outcomes.

And not just in New Zealand.  In the UK, the Longitudinal Education Outcomes (or LEO) data links tax and education data, while in Canada, the University of Ottawa has done something similar (with great graphics).

…at an institutional level

Government agencies took a step forward in this work last year when, for the first time, they released data at an individual institution level – intended to help the government assess performance, to help people who advise prospective students on study choices but mainly, to help institutions understand which qualifications are leading to good outcomes and which are not.

Masses of data. Three huge spreadsheets. Outcomes for nine years post study for every provider in the system and every qualification. But so far, there has been little apparent reaction.

So what difference does an institution make?

But does it matter where you study? Isn’t it what you study that matters? That’s a question we can answer with this new data.

Let’s just look at bachelors degrees and let’s look at outcomes five years after completion.  Figure 1 below shows the results for the eight universities and for the whole of the sector.

Figure 1: Outcomes for bachelors graduates five years following completion, all fields of study – universities

Source: Ministry of Education and Tertiary Education Commission, Employment outcomes of tertiary education data.
Note: UA = University of Auckland, UW = University of Waikato, MU = Massey University, VUW = Victoria University of Wellington, UC = University of Canterbury, LU = Lincoln University, UO = University of Otago
Refer to this page and to the “understanding this data” page of the spreadsheets for an explanation of the business rules for the data, for limitations and confidentiality measures
The graph doesn’t show the proportion on benefits or those who have unknown destinations, which are both small
Earnings are reported only for those whose destination is employment
The “all” group includes all providers offering qualifications at this level, not just those whose data is shown.

The first thing to note is how similar the results are.  Earnings are slightly higher for graduates of Auckland, Victoria, Lincoln and Otago but the margins are slight.  Lincoln graduates are more likely to be in employment because fewer of its graduates go overseas.

Of course, it’s not just universities that offer bachelors degrees.  Figure 2 shows the results for the seven polytechnics in the main metropolitan centres.

Figure 2: Outcomes for bachelors graduates five years following completion, all fields of study – polytechnics in main cities

Source: Ministry of Education and Tertiary Education Commission, Employment outcomes of tertiary education data.
Refer to the notes for Figure 1 above.
Ara = Ara Institute of Canterbury, MIT = Manukau Institute of Technology, Otago = Otago Polytechnic, Weltec = Wellington Institute of Technology, Wintec = Waikato Institute of Technology

There is more variability among the polytechnics. Employment rates are high, in six of the seven polytechnics, higher than the rate for all providers. Median earnings of graduates from MIT and Weltec are high, higher than for any of the universities, whereas the median earnings of some of the polytechnics’ graduates is below the national median.

Part of the variability among the polytechnics reflects the fact that they have lower numbers of bachelors graduates, and that introduces statistical noise. Polytechnics are more regionally focused than universities, meaning that they serve a local labour market, rather than a national market; this means that graduates from some polytechnics – those in smaller centres – are likely to earn less than those in larger labour markets.

But the major factor influencing outcomes is field of study. What someone studies has a significant influence on employment and earnings, second only to the level of the qualification. Most of the universities cover a very wide range of fields of study, while polytechnics tend to offer more specialised, applied bachelors qualifications.  For example, Ara Institute of Canterbury has a very high proportion of its employed bachelors graduates in creative arts, the field with the lowest earnings; 39 per cent of Ara’s employed bachelors graduates have specialised in creative arts, compared with 12 per cent across all employed bachelors graduates. That has the effect of depressing the median earnings of Ara’s graduates. By contrast, the great majority of Weltec’s employed bachelors graduates were in information technology, a field with high earnings, while the bulk of MIT’s working bachelors graduates are in engineering, information technology, management and commerce and health – all fields that generate relatively high earnings.

Looking at some fields of study

Science

All of the universities have large programmes in science, but the polytechnics haven’t ventured into this field at this level.  Figure 3 shows the outcomes in that field.

Figure 3: Outcomes for bachelors graduates in natural and physical sciences five years following completion – universities

Source: Ministry of Education and Tertiary Education Commission, Employment outcomes of tertiary education data.
Refer to the notes for Figure 1 above.

As in Figure 1, we see a trade-off between the numbers in employment and the numbers in other destinations.  Massey’s high employment rate derives from the low numbers going

overseas, while Lincoln’s is a consequence of the low numbers in further study.  Differences in median earnings are relatively slight – Auckland’s median is 4.5 per cent above the median for the whole set, while Lincoln’s is 9.5 per cent below.  What is most striking about this graph is the very high proportion in further study.  Between a 20 and 25 per cent of all bachelors graduates in science are still in, or are back in, tertiary study five years after graduation, compared with between 10 and 15 per cent across all fields of study.  Looking into the narrow field data shows even more surprising figures, with between 25 and 30 per cent of biological sciences graduates in further study.  Those are statistics that, one hopes, are the focus of much more detailed examination in science faculties.

Commerce

The other field where all universities have a presence is commerce.  Figure 4 shows the results – for all the universities as well as for the three polytechnics with significant numbers of bachelors graduates.

Figure 4: Outcomes for bachelors graduates in management and commerce five years following completion – universities and some polytechnics

Source: Ministry of Education and Tertiary Education Commission, Employment outcomes of tertiary education data.
Refer to the notes for Figures 1 and 2 above.

There’s very little difference between the universities in destinations, with Lincoln’s employment rate a little above the others and Canterbury’s a little below.  The rate of going overseas is higher than in all fields, while a relatively low proportion of graduates are in further study – as one would expect in this vocational area of study.  Victoria, in particular, has very low numbers in further study, while Victoria and Otago have higher numbers overseas.  Unitec’s pattern is similar to the universities’.  The other two polytechnics have very high employment rates, largely because so few of their graduates have gone overseas.

Among the universities, earnings range from 6.8 per cent below the median for all commerce graduates (Waikato) to 5.4 per cent above (Auckland), possibly reflecting regional effects.  The three polytechnics’ commerce graduates have median earnings below the national median.  That may reflect the sub-specialisations taken by those students.

Information technology

Another applied area with significant polytechnic involvement that has attracted a lot of interest is information technology.  Persistent complaints from employers about shortages of graduates and about the work-readiness of graduates led the government to create ICT graduate schools designed to address those problems.  Figure 5 shows the results – for a period before the creation of the new schools.

Figure 5: Outcomes for bachelors graduates in information technology five years following completion – some universities and polytechnics

Source: Ministry of Education and Tertiary Education Commission, Employment outcomes of tertiary education data.
Refer to the notes for Figures 1 and 2 above.

Here there is considerable variation between institutions. The median earnings range from 13 per cent above the median for all (Victoria and Weltec) to 12 per cent below (Waikato).  All the polytechnics and also AUT have relatively high employment rates and lower overseas rates.  Further study rates are low in all institutions, likely reflecting the high demand for graduates and a consequent low need to enhance one’s qualifications.  That too is something that the institutions and employers will be thinking about.

This data is so rich

This data is so rich that is tempting to go on and on, looking at narrow fields of study, not just the broad field, looking at other levels, not just bachelors, looking at other types of providers.  Academic leaders will be looking at each other’s data, measuring how they compare with their competitors.  That’s the true value of the data, encouraging those leaders to focus on how their qualifications work in the labour market and looking to improve.

 

Roger Smyth has 30 years’ experience working in tertiary education – initially in senior management in a university and later in the Ministry of Education. At the Ministry, he managed the Tertiary Sector Performance Analysis team and then took over as Group Manager, Tertiary Education Policy. He retired from the Ministry in April last year and now works as an independent adviser on and contractor in tertiary education.

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