In brief

• In spite of significant constraints, New Zealand universities still provide high-quality education.
  
• To the extent that students and parents think about the returns on investment from higher education, it is not clear that an Australian education is superior.
  
• In terms of returns, what matters more is the discipline studied rather than the institution.

Political activism has infiltrated educational institutions everywhere

In Part 1 of this article, I argued that New Zealand universities have become excessively politicised. Social justice activism is interfering with academic freedom and the quality of the education that we are offering our students. Negative publicity around this is one of the reasons why increasingly many students are looking overseas. Still, I think at this point in time it makes sense for students to study in New Zealand.

However, we need to recognise that when we talk about high achievers leaving, we are mostly talking about the well-off who have the financial ability to pay overseas tuition. Parents and students should be aware that the type of managerialism, social activism or problems of low morale that I discuss above are not unique to Auckland or even New Zealand. Arguably, New Zealand institutions are affected more given our perennial lack of funding and the thin margins we operate on. But going overseas does not necessarily insulate one from such afflictions.

However, anecdotal evidence suggests that, in spite of this politicisation, leading Australian schools are providing a student experience that is better than what is on offer at Auckland — for instance, smaller classes and better pastoral care. This is almost entirely due to the fact that the good Australian schools are not hurting as much in terms of government funding as we are. This allows them to offer a better product on the whole.

NZ universities are much more homogeneous than systems elsewhere. This is partly because the government uses the same funding formula for all universities here. For many New Zealand students (and the firms hiring them), there’s not much difference between a degree from Auckland or Otago. Australia likely has more variance across institutions, which means they have a better chance at selling top-tier students on the idea of attending a “top” school, as in the US.

The NCEA system bears part of the blame. The general perception is that it is not particularly rigorous and does not adequately prepare students for university and beyond. As a result, many schools offer Cambridge or IB in addition to NCEA, but these two are very much geared toward an overseas perspective; students pursuing Cambridge or IB (often coming from more privileged backgrounds) naturally gravitate toward overseas institutions.

Parents and students should still consider studying in New Zealand

By and large, parents and students consider the money spent on higher education an investment in their careers.

So, for those who have the money, is going overseas worthwhile in terms of returns on that investment?

Studying in the US or the UK, particularly the former, remains prohibitively expensive. Consequently, a lot of students are gravitating toward Australia.

Australia is certainly a bigger market than New Zealand, but it is still small compared to the US or Western Europe. Even in Australia, many students will eventually be looking for jobs elsewhere in the West or increasingly in the large Asian markets — China, India, Singapore, Hong Kong and South Korea.

It is not clear to me that a degree from (say) Sydney or Monash provides one a leg-up in these markets compared to Auckland.

What students and parents often also fail to grasp is that, by and large, across the industrialised West, the income returns to majors (e.g. business vs. humanities) far outweigh the returns to going to a more selective institution.

Students going to Australia do pay domestic fees, but they are not entitled to StudyLink, interest-free student loans or one year of free university education.

When you consider the additional expense of going to Australia, I doubt that the returns on investment outperform studying in New Zealand.

Given their very high costs, the same would be true of the US and the UK too.

This may change as New Zealand falls further behind on many measures, but at this point of time, studying in New Zealand still makes more financial sense.

Ananish Chaudhuri is Professor of Experimental Economics at the University of Auckland and author, most recently, of “Economics: A Global Introduction“. 

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