A well-educated workforce is the key to prosperity

Roger Partridge
NZ Herald
7 October, 2021

"For every economist, there exists an equal and opposite economist." Or so satirists of the economics profession claim. The truth is most economists agree on most of economics. And even though they disagree on some things, all economists agree that human capital is critical for productivity. A country's prosperity depends on the skills, knowledge, and experience of its workforce.

Sadly, the stock of human capital in New Zealand is in long term decline. Or at least it is if you measure it by the educational achievement of successive generations of school leavers.

A growing proportion of children leave school unable to read an instruction manual or do basic maths.

Over the past 20 years, New Zealand's education system has slipped from being the envy of the world to barely mediocre.

The Progress in International Reading and Literacy Study compares the literacy skills of Year 5 school children. In the latest study, New Zealand students placed last among all English-speaking countries.

We were 24th out of all 26 participating OECD countries.

The international evidence shows a similar decline in mathematics. The Trends in International Mathematics and Science Study compares maths knowledge in Year 9 students. The most recent study in 2018/19 shows New Zealand students' maths knowledge in Year 9 has fallen below all other English-speaking countries.

The drop isn't because children from other countries have overtaken our students. The decline in ranking mirrors a decline in student attainment. By 2018, Kiwi children were 1.5 years' worth of schooling behind their peers just eighteen years earlier.

The results of a recent survey conducted by the Tertiary Education Commission are even more alarming. The Commission studied 800 Year 12 students, all of whom had successfully achieved NCEA Level 2. Forty per cent failed to meet an international benchmark for functional literacy. Forty-two per cent failed it for numeracy.

The New Zealand education system is also now one of the most unequal in the world. The gap between the educational "haves" and "have nots" eclipses all our English-speaking OECD peers.

And all this, despite government spending per child increasing in real terms by more than 30 per cent since 2001.

These trends are worrying enough. But the rise of automation, artificial intelligence, and pressures from developing economies compound the problem. Poorly educated school leavers will find it harder and harder to find jobs.

The country is fortunate that Kiwi students participate in international studies of student achievement.

Our education system is so corrupt that data from our national assessment, NCEA, suggests education outcomes are improving rather than falling.

If NCEA data paints a picture of constant improvement, while almost all other measures disclose a decline, New Zealand has a fundamental problem with education assessment.

Two reports from New Zealand Initiative research fellow, Briar Lipson, identify the failings at the heart of NCEA. The first report, Spoiled by Choice. How NCEA hampers education, and what it needs to succeed, identifies a core part of the problem is NCEA's extreme flexibility. Students are presented with over 7000 subject matter choices. Literacy and numeracy requirements are modest. These modest requirements aside, all subjects — from mathematics to meat processing — are valued equally.

This means well-advised or motivated students can still achieve a broad and valuable education under NCEA. However, for less fortunate students NCEA offers a plethora of safer options. The cost of NCEA's flexibility is huge inequality in student achievement. And of widening — and now alarming — levels of functional illiteracy and innumeracy.

Lipson's second report, New Zealand's Great Education Illusion: How bad ideas ruined a once world-leading school system, was published last year. Relying on evidence from empirical studies and cognitive science, the report argues that the solution to New Zealand's education woes is to strengthen the role of knowledge in the New Zealand Curriculum.

Education reforms in England provide support for Lipson's recommendations. Over the last decade, England undertook a dramatic overhaul of that country's national curriculum. The outcome has been remarkable. English students have shown dramatic increases in their scores in international assessments.

If New Zealand is to solve its poor educational outcomes, the evidence suggests similar reforms are needed here.

Education reform will benefit the economy. But the real winners will be the Kiwi school children the education system is currently failing.

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