Young People in New Zealand: Opportunity and Choice

Alison Robins

The Prime Ministerial Taskforce on Employment highlighted issues for young people in the areas of education, employment, and income support in response to deep concern expressed during consultation in the community about young people and their employment prospects. The Task Force noted that the overall unemployment rate for 15 to 19-year-olds in the labour force was 20%, and twice that for young Māori.

This paper explores the potential implications of alternative policies intended to diminish the financial incentives for young people to avoid participation in secondary and tertiary education and training in favour of unemployment. The paper examines two policy options: (1) parental income testing of the Unemployment Benefit for young people, and (2) a reduced rate of benefit for young people living at home with their parents.

The paper concludes that these policies could have unintended negative effects for some groups of young people, because groups currently under-represented in the tertiary sector (especially Māori, Pacific and young people from low-income families) also require non-financial factors to be dealt with before they can be influenced by financial incentives alone. Given the drawbacks discussed, it appears that the Youth Employment Strategy has wisely avoided these policy options for young unemployment beneficiaries.