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Insights 09: 18 March 2016
We've just launched our 2015 Annual Report
Poorly Understood: The state of poverty in New Zealand
Communities of Care - How Canada welcomes so many refugees

Shaping New Zealand's policy debates
Dr Oliver Hartwich | Executive Director |
The late Ronald Reagan once said “There are no great limits to growth because there are no limits of human intelligence, imagination and wonder”.

At The New Zealand Initiative we share his optimism.

We believe that bold thinking, rigorous debates and good ideas can create a better future for this country. And we see it as our role to promote better informed conversations on the issues that matter to all New Zealanders.

You will find this in our latest annual report released today.

Our contributions come in all shapes and sizes. They range from our policy reports to our weekly column in the National Business Review. They are the meetings we have with ministers, MPs, bureaucrats, mayors, councillors and stakeholders. They are our speaking engagements and our radio and TV appearances.

We are proudly evidence-based and non-partisan – and we are proud to have gained the respect of politicians across the political spectrum.

As Greens co-leader James Shaw put it: “I often disagree with The New Zealand Initiative’s proposals – but that’s the point. We need more challenging ideas, quality research and thought leadership in New Zealand, not less. The New Zealand Initiative makes a valuable contribution to robust debate in this country.”

Or as ACT leader David Seymour said about us: “The Initiative is a beacon for those of us who believe that public policy is not just some background noise but the ultimate output and whole point of politics. The Initiative team have managed to advance ideas that politicians couldn’t or wouldn’t come up with themselves, all the while keeping us pollies engaged and intrigued.”

In the lead-up to next year’s election, expect more visionary ideas from us.

That is what The New Zealand Initiative is all about. Because we believe that a better future is possible.

The company you keep
Martine Udahemuka | Research Fellow |
Take a good look at the person sitting next to you at work. They might have a lot more influence on your life than you give them credit for.

And it looks like this applies nowhere better than in the classroom.

A myriad of factors influence school achievement. Though not an exhaustive list, cognitive ability, teacher quality, and family backgrounds have much to do with it.

But there is one element that people might be less comfortable to talk about: the peer effect.

The presence of obedient and diligent students may positively influence outcomes for more disruptive students through knowledge spill-overs.

Conversely, having a classmate who is otherwise not interested in what the teacher has to say could affect their peers well into adulthood. Particularly if the teacher then has to devote more of their time to the student rather than teaching the class.

Knowing who is in your child’s classroom matters.

In New Zealand we continually obsess over the decile divide. Parents who bend over backwards to move their kids are sometimes alleged to be choosing on ‘social factors’ rather than ‘educational factors’.

Though choice on the latter may be misguided as current measures of school achievement do not account for student circumstances, the former may carry some weight.  

In their 2016 paper, Carrell, Hoekstra and Kuka show the long term consequences of having a disruptive classmate in elementary school. They looked at the impacts on test scores, college enrolment and completion, and on earnings.

Besides making his peers score worse on tests, the researchers found that one additional disruptive boy in a class of 25 would reduce his peers’ lifetime combined earnings by around US$100,000.

And they estimate that having four such classmates has roughly the same effect on peer future earnings as replacing an average teacher with one in the bottom 5 percent.

Though this is one study, the findings have implications for classroom composition. New Zealand tends to group students by not much else other than age, but these kinds of information could enhance teacher and student sorting. 

And of course, for parents making school choices, it pays to have good information on what they value, whatever that may be.

So if it is the case that the same holds in the workplace: in future pursuits of employment skip the salary question and ask to meet the existing employees instead. It may just pay off.  

Teaching competition
Roger Partridge | Chairman |
Talk to a teacher at a state school and most will tell you competition is a dirty word. When it comes to relationships between schools, cooperation rules.
Schools do not even compete for pupils. Instead, students are allocated according to where they live.
School zoning is such an institution that this might not seem odd. But imagine for a moment that the Government introduced laws applying zoning to a field other than schooling, say, to supermarkets.
Under a (hypothetical) Supermarkets Zoning Act, customers would be allocated to a local Foodstuffs or Countdown store based on where they lived. Individual stores would be required to turn away any customers looking to take advantage of a better offering at an out-of-zone store.
The zoning would apply only to 5 to 18-year-old customers. There would be exceptions for preschoolers, whose parents could shop for them wherever they liked.
University-eligible customers would also be allowed to shop in any zone. Indeed, the competition for university-aged customers might be so fierce that one of the Otago-based stores might sponsor a Super Rugby franchise to attract out of zone customers (as the University of Otago does).
And some customers might be lucky enough to win a ballot to shop out-of-zone at Sylvia Park.
Of course, that would not be the end to the absence of in-zone competition. Supermarkets in one zone would not be allowed to poach staff from competing supermarkets in other zones with offers of higher pay.
Nor would competition among supermarket staff-members be rewarded. Supermarkets would be prohibited from paying any individual staff member more than any other staff member with the same level of experience doing the same job.
Do we have any doubt what the outcome of this would be on supermarket service or supermarket prices?
There may be the odd person in other professions who is envious of the teaching profession’s lack of competition. After all, competition can be tough.
But there are laws to stop other professions “cooperating” rather than competing. Indeed, in the business world it is called collusion, and there is a dedicated police force at the Commerce Commission to prevent it. The reason is that we know competition improves quality and lowers prices.
As we struggle to improve the educational outcomes for our least-well-off, maybe our schools could learn to compete a little more. 

On The Record
All Things Considered
  • Tired of the truth being stranger than fiction, particularly in the era of Donald Trump, fans of the Simpsons TV show have taken things into their own hands.
  • This dog sitter has found an ingenious and amusing way to prove to his employers that he is hard at work. No chance of an Academy Award though.
  • Amid the (legitimate) wails of Generation Y about housing affordability, Brendan O’Neill reminds us the life wasn’t a bed of roses for baby boomers either.
  • Cycling in Africa can be a dangerous pastime, because if the ostriches don’t get you, the antelope will.
  • Even the most experienced office prankster will have to doff their hat at the sheer brilliance of this workplace lark
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