Jake is a 16-year-old student with NCEA level 1 who has just left school.

His friends and family tell him “more education is always better; graduates earn more on average than non-graduates”.

Jake is sick of school, but he is being pressured by his family to gain level 2 and 3 through tertiary study.

He does not know whom to believe, or what to do next.

This is the reality for many students who have left school with only an NCEA level 1 qualification.

The phrase “more education is always better…” can be misleading: Unadjusted statistics showing that “graduates earn more on average than non-graduates” is not the full story. Students who complete NCEA level 2 and 3 by the age of 18 differ systematically from the group of students who leave school at age 16 with only NCEA level 1.

The right choice for one group of students is not always the right choice for another.

And the truth is, until recently, New Zealand has not known what the most effective pathway is for this group of students either.

New insights from a recently released Treasury working paper have shone light into this difficult question. Does it make sense for students who leave school with only NCEA Level 1 to go back to pick up a level 2–4 certificate afterwards?

It does – for that half of the students who completed the qualification. This is because they are more likely to be employed and less likely to be on a benefit. But 49% of the students who did not complete the attempted certificate saw no benefit.

It is a coin flip. Heads you get a 9-percentage point increase in your likelihood of employment after completing the certificate; tails you get the hassle of having tried and failed – with no benefit.

Insights and decisions informed by quality research such as this Treasury report can help students achieve better life outcomes.

Interestingly, the Treasury findings were gleaned from Statistics New Zealand’s Integrated Data Infrastructure (IDI) – New Zealand’s largest research database. Researchers built a comprehensive image of a student’s background using linked administrative data from all the government agencies, public surveys and the national census.

Like the advice Jake received from his friends and family, the findings from this paper are not the full story.

Jake has another option – going into a trade. With better information and advice, he would know whether it is the better option for him.

The Treasury Working Paper referred to here is: “The Impact of Tertiary Study on the Labour Market Outcomes of Low-qualified School Leavers: An update (WP 18/03)”.