No easy fixes

This is the third and final part of my series:

The two important tertiary education problems you won’t hear about this election year

The first two parts of this series were the easy ones. I took two areas where the tertiary education system is failing, I reviewed the evidence and described the failure. Now we come to the really hard bit – what could an incoming government do to address the problems I described, to change the settings, to fix things up, to fix problems where there are no easy fixes.

Problem 1: Student allowances, a mechanism to help address issues of access to tertiary education.

Problem 2: Transition programmes which are designed to help people – those who can’t or don’t want to go on to vocational training or to higher levels of study – make a successful transition from school to work.

Stocks and flows

Each of these failing programmes has been set up to address a complex problem. And each problem has two dimensions:

a flow dimension, meaning a set of causal factors that (in the case of student allowances) get in the way of accessing tertiary education or (in the case of transition programmes) that make it hard for the person to get into the labour market
a stock dimension, meaning what we need to do if solutions to the flow problem aren’t successful, meaning that the person ends up as a young adult facing difficulty in accessing tertiary education or work.

This distinction between stock and flow occurs in many social policy areas. In justice, we are always hearing the argument between those who say the focus of efforts should be on the family and financial circumstances that lead to criminal behaviour and those who say that we need prison sentences to protect the public, as well as to modify criminals’ behaviour. The first group are discussing the flow problem, the second group the stock problem.

Of course, the reality is that we must address both. Only in a perfect world, only where we are 100% successful in solving the flow problem will the need for solutions to the stock problem disappear. Down here on planet Earth, we can and should do more, much more, to address the flow dimension in our two problem areas. But if we were to start today with successful work on the flow, it would more than a decade before today’s pre-schoolers reach the end of high school and we get to see the benefit of the first green shoots of the solution. And decades before we had the full benefits of that work. And even then, it wouldn’t be perfect; even the best intervention will have some slippage. So we will likely always need to address the stocks, as well as the flow. Always.

In our two areas of failure …

In each of the problems in this series, the flow dimension relates to the young person’s experiences in early childhood, in the early years of life and the first stages of the person’s encounters with the education system. The stock dimension comes into play 15-18 years later, as the person reaches the school leaving age.

These are areas where multiple policy areas converge and overlap – health, housing, welfare, labour market, as well as education, and in education, all sectors of the education system. Our focus needs to be on the person, all dimensions of the person’s life, rather than on ownership of interventions and funding lines and policies. It’s for that reason that the recent long-term insights briefing Preparing all young people for satisfying and rewarding working lives (which happens to include the problem areas covered in this series) was a joint project between four ministries. And why the recent Productivity Commission report A fair chance for all discusses how the public sector management system as a whole deals with the disadvantage faced by many New Zealanders and therefore, talks about the need for solutions that avoid siloes, that are whānau-centred, that are enabled by government.

Further, the causes of (and therefore, the solutions to) these two problems – especially to the flow dimensions – are both complex, multifaceted. There is no recipe for solving them. History is littered with well-intentioned failure in this area of government intervention. No one has all the answers or knows what will work in every situation. The worst thing an incoming government could do is to design a glib solution, send the officials in to implement and wait for the results. Don’t send in the officials!

In what follows, I discuss how the government might think about its approach to these problems, and I talk about the principles that should underpin their analysis, as preparation for addressing the problem itself. I look first at the flow dimension of the two problems and then at what is needed to improve the two tertiary education interventions – transition programmes and access support programmes – that are currently failing.

Looking at the flow …

In the first two parts of this series, I described economist James Heckman’s finding that ability gaps between individuals and across socioeconomic groups appear at an early age, for both cognitive and socio-emotional skills. Children’s skills are highly correlated to family background factors like parental education and maternal ability; when those two factors are statistically controlled for, gaps disappear or are reduced. Family resources matter too but not nearly as much as factors such as parenting skills; meaning that disadvantage is not able to be fixed simply by providing higher incomes; it’s more complex than that[1].

Parents become reference points as a child grows. This is why problems of disadvantage are inter-generational[2]. Failing to provide effective support in early childhood has long-term impacts. Therefore, Heckman argues that interventions should occur early in life[3] because, as children progress through school, gaps become entrenched or grow; after year 2, schooling tends to play only a minor role in reducing gaps[4].

Data from the Growing Up in NZ project suggests that risk factors in early childhood occur in clusters[5] and that “targeting single risk factors has limited capacity to minimise downstream adverse outcomes”[6]. If early interventions to help disadvantaged children are not followed up by later support, the effect of the early intervention is lessened[7], while Heckman’s group argues that the later an intervention is given to a disadvantaged child, the less effective it is likely to be. And later interventions are more likely to be more costly[8]. What is more, if untreated, gaps in skills between children can become more pronounced over time[9].

So the evidence is clear: Intervene early. Take a holistic view of the child and the whānau. Address parenting skills.

But how? How can families be helped to adjust to the birth of a child? How can parents be helped to develop the skills they need to support the growth and development of a child?

More than anything else, that is the subject of the Productivity Commission’s report A fair chance for all[10]. The report offers a critique of the way the NZ public management system has dealt with disadvantage over decades. The Commission has recommended changes to public management that would see new ways of working that are “locally-led, whānau-centred and centrally enabled” in which government agencies participate alongside communities in devising holistic interventions to address problems that are identified and prioritised by the community. This sort of approach can “shift power to individuals, families, whānau, and communities by moving away from predetermined support to supporting them to achieve their aspirations”. The report gives examples of initiatives where this approach is already working. Manaaki Tairāwhiti, on the East Coast. The Southern Initiative in South Auckland. Both grew from the place-based initiatives set up by government in 2016. (The latter is also (more graphically) described in Rebecca Macfie’s article in the NZ Listener of 1 August).

It’s an approach consistent with the principles that underpin Whānau Ora. And it is at one with the four agencies’ long-term insights briefing.

Also critical to the Commission’s recommendations is a move to ensure the system generates and uses knowledge differently. The Commission sought advice from consultancy Frank Advice which set out a path to improved practice on evaluation, better coordination of agency information and evaluation practice, more open sharing of findings leading to better use of evidence in decision-making and in commissioning interventions[11]. The system holds great data and information assets (such as the Integrated Data Infrastructure, the riches of longitudinal studies such as Growing Up in NZ and other research resources). The challenges are to share information better, coordinate efforts, make better use of other sources of information (such as community-sourced data) to generate greater insight.

I can’t argue with any of that. So the first points in my advice to the incoming minister are:

The evidence is clear – disadvantage starts in the early years of life; that’s when the need for help is greatest, that’s when there is the greatest chance of long-term success, of cost-effectiveness in support, of breaking the intergenerational transmission of disadvantage.
Don’t just send in the bureaucrats. Instead, build on the learning from successful locally-led initiatives that draw on community resources and where government agencies are partners who can advise, facilitate, and open the way to funding, but without dictating or determining.
Make sure that early childhood educators are as highly capable as possible and well connected to their communities and to the groups leading family support interventions.
Improve the use of data and information to analyse issues, identify risk factors, analyse risk clusters to identify what is driving the problems, evaluate interventions, identify best practice, providing information to help target interventions.

The incoming tertiary education minister doesn’t control any of the levers involved in that advice – in fact, no single portfolio covers that span of interventions. Indeed, that’s exactly the point of the Productivity Commission’s thesis and the four agencies’ long-term insights briefing; addressing disadvantage, especially in early childhood, will only be effective if the focus is on the person and the whānau, rather than on the individual issues and problems they face. That’s why communities need collective action – local knowledge, supported by expertise and funding from government agencies.

Therefore, success depends on the leadership of the incoming government forming a coalition of ministers and government agencies prepared to take on the challenges of the Productivity Commission’s recommendations, ready to evaluate the pilots discussed here, to commission the analysis needed and to carve out fresh, effective approaches to intervening early. No simple recipe – but the Productivity Commission has mapped out some of the way forward.

The incoming tertiary education minister’s role? To push his/her colleagues in the directions I discuss here and to work with them. And to ensure the agencies come on board.

It’s a big challenge. Will an incoming government be prepared to take this on? Perhaps, perhaps not. And if so, will it succeed? Probably, but likely only partially and with problems arising along the way. Even a modest gain is a gain. And we couldn’t really do much worse than we have over the last 30 years, could we?

What can be done with the stock problems

Student allowances

When student loans became the primary vehicle for government financial support for students in 1992, the allowances scheme was retained to complement loans, targeted to students with financial hardship who were seen as at risk of leaving study. That means that the allowances scheme is intended to support access to and persistence in tertiary education. But, in the first part of this series, our review of the evidence showed that:

The targeting approach in the allowances scheme is poorly designed; being solely focused on finances, the scheme doesn’t address the underlying barriers to study (which are primarily non-financial)
The targeting takes no account of the way people make decisions on complex financial matters like whether to enrol in tertiary education; this leads to much deadweight expenditure – with most allowance recipients being people who would have enrolled anyway, financing their studies via the loan scheme.

The scheme is poor value expenditure. Its design responds more to electoral pressure from students and their advocates rather than to a true assessment of the needs of those who struggle to gain access to the system.

But targeting access is always going to be hard. How do you connect with people you have no contact with? How do you encourage them to change their behaviour when you don’t know who they are and what drives their decision-making? While the government’s mechanism – the allowances scheme – is failing, some institutions have created initiatives to break these barriers; what are the features of those schemes and how well are they working?

Here’s my advice to the incoming minister:

The first step is to commission research and analysis, to generate insights, to identify the characteristics of those who are at risk of exclusion. The first step – a deep analysis of data from the Integrated Data Infrastructure to identify risk factors for non-participation in tertiary education. That means profiling non-participants whose school record suggests they had the potential to succeed in tertiary education, either higher education or VET or other forms of tertiary education.
The second step may be qualitative research; using that profile, ask some schools for their help to identify members of a sample of secondary school students at risk and interview the sample and their families, conduct qualitative research on their circumstances, their motivations, their aspirations, their decision-making. At the same time, check out initiatives and schemes, institutional schemes and schemes from other countries, that appear to be working – what appears to drive their success?
Third, start from scratch with the design of a new mechanism, fuelled by the information gathered, recognising what the evidence tells us about price/cost decision making and also taking account of what appears to be working elsewhere. Target the support – the financial support as well as other supports – to those assessed as at risk. Make sure that the design doesn’t focus solely on getting the people in; access is about getting people to participate and also helping them achieve and have success, so any new scheme needs to include learning support. Create a scheme that institutions can help manage, so that they have ownership, so they can tailor the systems and the support to their own institutional flavours.
Fourth, phase out student allowances! A scheme that has outlived its time.
Fifth, pilot, implement, evaluate.

Of course it’s hard. Of course it will be expensive. Likely more costly than the savings from discontinuing student allowances.

But it’s interesting to look at what some far-sighted institutions are doing in this area. Through building deeper relationships with schools. Getting students at school to see a tertiary provider as a next step in their path, not scary, not foreign, but an exciting place, somewhere they can have fun while learning. A rewarding place. Using students to run homework groups for kids in years 11 and 12. Employing students to return to their old high schools as ambassadors (and, of course, to be role models).

Of course it’s hard and expensive. But not impossible.

Transition programmes

Employability is the key to long-term well-being[12]. Transition programmes need to focus on employability.

Yes, cognitive skills and socio-emotional skills are both important for employability – they are necessary conditions, but they are not sufficient conditions. The second article in this series pointed out that the Youth Guarantee fees-free programme confirms that a focus on educational attainment is insufficient to make a real difference in employment.

My advice? In their review of the literature and of best practice, Mandy McGirr and David Earle look at the evidence of what does actually work in transition programmes that (like Youth Guarantee) are pitched at those who, as they transition out of school, are at risk of lacking employability skills, at risk of a life of limited, precarious employment[13]. They find that effective skills training programmes share a range of characteristics, including:

incorporating a work experience or on job training component
providing job seeking assistance
being tightly targeted to the needs of a particular group
being aligned to specific skill shortages for particular industries or regions
offering personal coaching, mentoring and case management
tailoring of individual plans for learners.

My advice to an incoming minister is to start with those findings. Rebuild YG along those lines. Then pilot, implement, evaluate.

Yes, it’s hard. And expensive. And it will never be entirely effective – remember Heckman’s finding, quoted in the second article in this series: interventions should occur early in life because, as children progress through school, gaps become entrenched or grow: the later an intervention is given to a disadvantaged child, the less effective (and the more costly) it is likely to be[14].

But to get real value from the investment we have already made, that the government is making every single day that YG runs, there is no viable alternative.

Things you won’t hear about in the election campaign

This series focuses on two important issues you won’t hear about in the election campaign, despite their importance.

Maybe that’s a good thing; the last thing anyone wants is for major parties to be forced into rapid, ill-thought-out commitments during the heat of the election debate. And picture the rage of students associations at any hint of the sort of changes in the allowances scheme that I argue for.

No, big questions are best worked through systematically – researched, analysed, designed and piloted. Then implemented. Then evaluated.

My hope is that, even though these questions won’t make headlines during the election campaign, they may find their way into the agency briefings for the incoming minister for tertiary education. And I hold this hope because I read with optimism the long-term insights briefing [15] that I have referred to through this series. I hope, I really hope, that the insights in that paper and the approaches discussed in The Productivity Commission’s report A fair chance for all (plus, naturally, the ideas in this series) find their way into the BIMs read by the new tertiary minister in November this year.

References

This comment drew on the following …

Berntson E (2008) Employability perceptions: nature, determinants and implications for health and well-being Psykologiska institutionen, Stockholm University

Carneiro P, Cunha F and Heckman J (2003) Interpreting the evidence of family influence on child development Research Gate

Cunha F and Heckman J (2007) The technology of skill formation NBER Working Paper No 12840 National Bureau of Economic Research

Drake R and Wallach M (2020) Employment is a critical mental health intervention Epidemiology and Psychiatric Sciences 2020 29:e178

FrankAdvice. (2023). A learning system for addressing persistent disadvantage. Productivity Commission

Hanushek E (2011) The economic value of higher teacher quality Economics of Education Review, vol. 30, pp. 466–479.

Heckman J (2011) The economics of inequality: the value of early childhood education American Educator, Spring 2011

Hofer A-R, Zhivkovikj A and Smyth R (2020) The role of labour market information in guiding educational and occupational choicesOECD Education Working Papers No 229, OECD Publishing

Kautz T, Heckman J, Diris R, ter Weel B and Borghans L (2015) Fostering and measuring skills: improving cognitive and non-cognitive skills to promote lifetime success OECD Publishing

MBIE et al (2023) Preparing all young people for satisfying and rewarding working lives MBIE, MSD, Ministry of Education, Ministry for Women

McGirr M and Earle D (2019) Not just about NEETs: A rapid review of evidence on what works for youth at risk of limited employment Ministry of Education

Morton S, Atatoa Carr P, Grant C, Berry S, Marks E, Chen X and Lee A (2014) Growing Up in New Zealand: vulnerability report 1: exploring the definition of vulnerability for children in their first 1000 days Growing Up in New Zealand

NZ Productivity Commission (2023a) A fair chance for all: Breaking the cycle of persistent disadvantage Productivity Commission

NZ Productivity Commission (2023b) A fair chance for all: Overview Productivity Commission

OECD (2019) Skills matter: further results from the Survey of Adult Skills OECD Publishing

Pacheco G and Dye J (2013) Estimating the cost of youth disengagement in New Zealand AUT

Nedelkoska L and Quintini G (2018) Automation, skills use and training OECD Social, Employment and Migration Working Papers, No. 202, OECD

Silla I, De Cuyper N, Gracia F, Peiró J and De Witte H (2008) Job insecurity and well-being: moderation by employability Journal of Happiness Studies 10, 730-751

Thomas S, Meissel K and McNaughton S (2019) What affects how often mothers read books to their preschoolers Ministry of Education

TSI and Auckland Co-design Lab (2022) Unleashing the Potential of Whānau Centred and Community Led Ways of Working Enhancing Collective Ownership and Action Auckland Co-design Lab

TSI and Auckland Co-design Lab (2021) Designing for equity and intergenerational wellbeing: Te Tokotoru Auckland Co-design Lab

TSI and The Auckland Co-Design Lab. (2019). Learning in complex settings: A case study of enabling innovation in the public sector Auckland Co-design Lab

Endnotes

[1] Cunha and Heckman (2007); Carniero, Cunha and Heckman (2003). See also Thomas et al (2019)

[2]Hofer, Zhivkovikj and Smyth (2020)

[3] Cunha and Heckman (2007)

[4] Heckman (2011)

[5] Morton et al (2014), Thomas et al (2019)

[6] Morton et al (2014)

[7] ibid

[8] Cunha and Heckman (2007)

[9] Hanuschek (2011)

[10] NZ Productivity Commission (2023)

[11] The resulting paper, FrankAdvice. (2023). A learning system for addressing persistent disadvantage. is really instructive.

[12] Berntson (2008) Employability perceptions: nature, determinants and implications for health and well-being

Drake and Wallach (2020) Employment is a critical mental health intervention

Silla, De Cuyper, Gracia, Peiró and De Witte (2008) Job insecurity and well-being: moderation by employability

[13] McGirr and Earle (2019) Not just about NEETs: A rapid review of evidence on what works for youth at risk of limited employment

[14] Cunha and Heckman (2007) The technology of skill formation

^[15]MBIE et al (2023) Preparing all young people for satisfying and rewarding working lives MBIE, MSD, Ministry of Education, Ministry for Women