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Skills, wages and wealth up

Skills, wages and wealth up - Industry training in New Zealand

16 November 2004

Two pieces of research released today show that the number of workers being up-skilled through industry training can double by 2007, and the wage and productivity gains of those trainees will be between 5% and 20%.

"The Industry Training Federation is proud to release research relevant to New Zealand's economic prosperity", said Pieter Burghout, Chair of the Industry Training Federation.

"The New Zealand Institute of Economic Research report shows that on average, a trainee after industry training is likely to be 5% -20% more productive than they would otherwise have been".

Industry trainees are likely to be at the high end of the 5% - 20% range because of their lower skills/ qualification level prior to training (ie they learn more), and the formal qualifications gained through industry training.

"The research uses wage effects to measure productivity gains, so those increases are directly what go into workers' pockets. We can not yet measure the direct productivity increases to firms, but we know that firms are putting in the equivalent of at least two dollars for every dollar the government contributes and wouldn't do if they didn't see a return on their investment. This NZIER work is a solid step to a theoretical basis for understanding our experience.

New Zealand has since 1992 had a unique system of training in the World. The relative dearth of information means the ITF continues to seek research collaboration opportunities.

"The ITF is also releasing work on our estimate of demand for Industry Training through to 2007. We can now say that the Government's target of 250,000 learners in industry training during 2007 is not only possible, it is probable, although it remains a challenge.

"The NZIER report also shows that training density is associated with increases in wages and increases in value added per worker. Getting to 250,000 trainees by 2007 is good for business, good for workers and good for New Zealand", said Pieter Burghout.


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