New research confirms the major contribution New Zealand's eight universities make to the nation's economy, through productivity gains from research, innovation and teaching as well as through international education.
"Today the university sector is big business with 172,000 students enrolled nationally. The collective expenditure of the eight universities is $3.4 billion annually, which is about 1% of New Zealand's GDP. They employ about 20,000 academic and other (full-time equivalent) staff, nearly 1% of the workforce.
The report found that universities contribute to New Zealand's economy through the long term contribution of university education and research, improvement in productivity attributable to university research, the improved productivity of university graduates and through international education earnings.
The wages of workers without a degree are 1.6 to 1.9% higher as a consequence of working with graduates.
A 10% increase in higher education research spending will eventually increase GDP by 1.75 to 1.84%.
For every $1 million spent in New Zealand by international students, GDP is increased by $1.6 million.
The report confirms a degree is a good investment.
Income premia for people with a tertiary education begin to emerge at age 25 to 29, peak at age 40 to 49 and are sustained until 60 to 65.
The report finds that graduates appear to accrue a range of other health, standard of living, wellbeing and intergenerational benefits. While this was not assessed in this study, international research suggests the benefits to graduates are typically worth about double the graduate's actual annual earnings.
University income is made up of: 42% government tuition grants and performance based funding; 28% is from student tuition fees and the remainder comes from research, commercialisation and other revenue.
The report was carried out by the New Zealand Institute of Economic Research using growth accounting and computable general equilibrium (CGE) modelling.
Universities New Zealand is the peak sector body representing New Zealand's eight universities, nationally and internationally.