New Zealand’s 1989 skill ecosystem reform: preparations, implementation, outputs and outcomes

Abstract

<p>This thesis assesses the impact of the 1989 skill ecosystem reform, whereby New Zealand initiated a comprehensive reform of its skill ecosystem. The reforms radically transformed the education and training system and were driven primarily by the approval of the Education Act 1989 and the Industry Training Act 1992 and their amendments. For this thesis, the reform ended in 2020 with the approval of the Education and Training Act 2020. The reforms were part of a broader political transformation in New Zealand that ended up embarking on market policies to increase its productivity. Education and training were identified as a necessary condition to achieve that goal. New Zealand’s skill ecosystem has its foundations in the strong system built in the country since the arrival of the first settlers, but that had slowed its dynamism in the 1970s, with enrollment rates lagging behind comparable countries and concerns about the ability of the skill ecosystem to respond to current and future skill needs. The reform decentralized the education system at the primary / secondary and post-secondary levels but created an institution, the New Zealand Qualification Authority (NZQA) that should allow students and trainees a seamless navigation across it. The reform had a strong involvement of the private sector. To evaluate the impact of the reform, the thesis faces several challenges: there is no adequate counterfactual, the design is continually changing, and the country experienced a series of international shocks during its implementation. To address these challenges, the thesis presents a comprehensive set of indicators to evaluate the reform's outputs and outcomes at different levels. In terms of outputs, which include the reform, enrollment in education and training, participation rates increased. In terms of outcomes, which include indirect and behavioural changes, the measures are mixed. At the end of the reform, the ease of finding high-level skills in New Zealand is similar to its long-term trend despite the more sophisticated economic structure, albeit with significant differences by firm size and industries. And the ease is lower than in comparison countries, raising questions about whether that level could change given the small size and remoteness of New Zealand's economy.</p>