Graduates and research - the real value of universities
17 July 2023 | news
By Chris Whelan
Universities New Zealand – Te Pōkai Tara
NZIER have released their latest assessment of the economic value of universities, confirming the crucial contribution universities make to New Zealand’s economy.
In short, NZIER finds that universities account for around 26,300 jobs in the economy – about 1.2% of all people in employment. The flow on effects of university employment account for another 2,190 to 4,380 jobs in the wider economy, and the direct spending of universities (salaries, supplies, etc) represents about 1% of the New Zealand economy.
As significant as these figures are, they only tell part of the story. The real long-term value of universities to the country comes from graduates and research.
Graduates, for example, will earn about $1.4m more over their working lives than those with a school qualification alone. That factors in both the time spent studying (and not working), and the 7-8 years on average it takes students to repay any debt. In reality, most graduates are financially better off after about age 34.
University graduates enjoy much higher levels of employment than non-graduates and tend to be more productive and innovative and to lift the productivity of teams around them.
In addition to the financial benefits, graduates are also more likely to enjoy better health, better quality of life, and better outcomes for their own children.
University research also makes a substantial contribution to the economy, generating a quarter of all research carried out in this country, while most of the remaining 75% is being done by people with a university qualification.
In 2021, universities awarded 86% of all of New Zealand’s postgraduate qualifications and 70% of all bachelors degrees.
NZIER estimates that 8.2%-9.7% of New Zealand’s economic activity (GDP) is a consequence of university research and ideas permeating out into the economy over time.
Though universities are around 1% of total economic activity nationally, the regions that house them especially benefit. Universities are 2.1% of economic activity in the Auckland region, 1.2% in the Waikato region, 3.4% in the Manawatū/Whanganui region, 2.1% for Wellington, 1.9% for Canterbury, and 5.9% for the Otago region.
The economy itself is changing rapidly and needs more of the skills and knowledge universities provide. At the time of the 1996 Census 33% of all jobs in the New Zealand economy were jobs with a level of skill commensurate with a bachelors or postgraduate qualification (ANZSCO Level 1). By Census 2018, just 22 years later, this had increased to 67% as the country continued evolving as a knowledge economy.
At any point in time about 3.4% of our population is now enrolled in university studies. By contrast that was just 0.6% in 1950 and 0.1% in 1900. 32% of our young people are now starting university within a few years of leaving school and employer demand for degree-qualified graduates continues to grow.
NZIER’s assessment confirms that universities are now core infrastructure underpinning every aspect of New Zealand’s social, cultural, and economic success.
NZIER Report 1: Regional impact of universities
NZIER Report 2: Economic activity of universities
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