Every year, some 60,000 young people leave school and make choices about their next steps that are important for the young people themselves, their whānau, and the New Zealand economy. Here we look at the latest data and research on school leaver outcomes, what determines these outcomes and how they can be improved.

Productivity growth across New Zealand has been lacklustre in recent times. Enhancing the skills and knowledge of the workforce will be a key part of getting the productivity lift we need. Higher skilled workers generate new ideas and innovation, facilitate the diffusion of new technologies and business practices and countries with higher education levels tend to attract more investment. Higher skills are also associated with lower crime rates and better health outcomes.

School leavers are our up-and-coming workforce. Understanding the pathways that students transition into after school can help highlight where and how to intervene to get better outcomes for learners and the economy.

Using Integrated Data Infrastructure (IDI) data, we tracked cohorts of school leavers up to five years after they left school to examine their education and labour market activities. Some school leavers engage in multiple activities in a given year. For example, they may be employed for part of the year and enrolled in a provider-based tertiary education course for part of the year. In this analysis, only one activity is allocated to each individual each year. We do this using the following hierarchy.

1. Provider-based tertiary education
2. Work-based industry training
3. Employed
4. Overseas
5. NEET

We also analysed outcomes when multiple activities were allowed in a single year. The headline statistics changed a little, but the overall conclusions did not.

Just over half of all New Zealand school leavers transition into education or training the following year and around one-quarter transition into work. Chart 1 shows the transition pathways of people who left school in 2017. One year after leaving school, half (49%) were in provider-based education, 5% were in workplace-based training, and a quarter were in work. In the following years, the proportion in work increases and the proportion in education decreases. Five years after leaving school, less than one-fifth were in provider-based education, 8% were in workplace-based or training and 45% were in work.

Most concerning about Chart 1 is that around 16%-20% of school leavers find themselves not in employment, education, or training (NEET). NEET rates can vary depending on how they are measured and the datasets used. And the NEETs in Chart 1 are not necessarily the same people year to year.

Studies of young people’s disengagement from the labour market1 cite evidence that inactivity and detachment from the labour market at an early age has long term scarring effects. It is likely to lead to unemployment, low-skill and precarious work, and lower earnings. Detachment is also associated with an increased risk of becoming marginalised or involved in high-risk behaviour such as drug abuse or crime, housing problems or homelessness, poorer health, and a lower quality of life. These outcomes lead to significant costs for the individual and for the society.

School leavers in 2017 were by no means exceptional. Looking at cohorts of school leavers from 2017 to 2021, one year after they have left school (in Chart 2), the overall numbers don’t change much year to year. This is despite the upheavals to the labour market and education systems brought about by the pandemic. In each cohort, just over half were in some form of education and training, about a quarter were in work and a stubbornly high proportion (16%-20%) were NEET.

Earlier research by the Ministry of Education2 using IDI data looked at the outcomes of students who left school between 2009 and 2015 showed that the Global Financial Crisis (GFC) and the subsequent recession influenced school leaver outcomes only a little. The proportions going into education, training, work, and the proportions that were NEET were very similar to the results we see in Chart 2 above.

A student’s educational attainment at school, strongly influences the pathway they take after school. And these pathways are quite entrenched. It is not an exaggeration to say that, for many young people, their prospects are limited even at the age of 16.

Chart 3 uses Ministry of Education data to look at school leavers in 2022 and examines the proportion who were enrolled in tertiary education one year later. Not surprisingly, 81% of school leavers who had attained a UE qualification at school were enrolled in tertiary education one year later. There drop off among school leavers with a NCEA Level 3 or below is startling. Only 4% of school leavers who had attained a NZEA level 3 at school were enrolled in tertiary education one year later. The figure for school leavers who had attained a NZEA level 1 at school was just 28%.

Those school leavers with lower qualifications are unlikely to enrol in tertiary education at a later date. Ministry of Education data also shows that enrolment in tertiary education is far more likely to happen in the year following school. For example, of school leavers in 2019, 60% were enrolled in tertiary education one year after leaving school. Only 11% first enrolled two years after leaving school and only 4% first enrolled three years after leaving school.

School attainment also strongly influences the level of tertiary study and, ultimately, the level of qualification a young person attains. Chart 4 shows the latest data we have available from the earlier study by the Ministry of Education on the highest level of tertiary qualification that school leavers in 2009 had attained seven years later. Among those who left school with a NCEA Level 3 or below, the proportion who attained a degree was small. Among those who left school with a NCEA Level 1 or below, more than half did not attain a tertiary education qualification.

We need to improve attainment at school, and we need to increase the number of school leavers transitioning into tertiary education and completing further qualifications. Anything less than this is a tragedy for the young people who fall below these standards and for the New Zealand economy. Unfortunately, the school attainment levels, school leaver destinations, and NEET rates outlined earlier have become so familiar, and so entrenched, that many of us accept them as the norm.

There are numerous ways to improve school leaver attainment. None of them are easy or inexpensive. The current government is focussed on rewriting the school curriculum, improving school attendance and banning mobile phones in schools.

Kids at risk of low attainment need to be identified at a young age so that interventions can be made early on to raise foundation skills. Many students need personalised wrap-around support.

Students need career guidance and exposure to tertiary education and the world of work while they are at school to help them make informed choices about what pathways they want to take. Tertiary Education Commission has developed a new careers planning website called Tahatū Career Navigator. Online resources need to be coupled with career support offered by career advisors in schools. But this is patchy at best with some schools funding whole teams of career planning support staff, and others none at all.

Schools might also benefit if there were mechanisms to identify and reward excellence in teaching. And there is no getting away from the fact that students from low-socioeconomic backgrounds tend to do worse at school. You can’t solve poverty overnight, but you can give these kids the support they need to break out of the poverty trap themselves.

As we have seen, many school leavers do not transition to tertiary education. This is despite the fact that there are several government agencies and dozens if not hundreds of not-for-profit community organisations involved in supporting transitions. School leavers also have a myriad of options for tertiary study across New Zealand’s regions with providers spending plenty of money on marketing. For example, on the West Coast, 27 tertiary education providers serve a population of just 32,900 people — that’s one provider for every 1,219 people. In Gisborne, 37 providers serve a population of 52,600 — that’s one provider for every 1,422 people (see Chart 5).

Tertiary education providers also work hard to attract students. In 2022, Te Pūkenga spent $26.6m on marketing, and subsequently received 231,586 enrolments in 2023, that’s $115 in marketing per enrolment.

If anything, the agencies supporting school leaver transitions are too fragmented. How can we know how much is money is being spent on transitions, what it is being spent on, and how effective this spending is, when the money is going through so many channels and into so many organisations? We might be better served by one central government agency taking responsibility in this space, Ministry of Education for example, and having a handful of well-funded, nationwide not-for-profit organisations supporting kids with career advice, life skills, access to local employers, and tertiary providers.

For many learners, the tertiary education system acts as a second chance to get the qualifications they were unable to achieve at school and then staircase their way to higher qualifications. Although as we have seen, the prospects for ‘second-chance learners’ are already limited.

Until we can raise school leaver attainment, we need to create the capacity in the tertiary education system to accommodate more second chance learners. We need to get them in the door, most likely with more engagement between tertiary education providers and schools, and we need to give them the support they need to achieve at least a NCEA Level 4 qualification. As we have already said, none of this is inexpensive. But education is an investment in our young people and our economy and should be treated as such.