'Earning earlier gives you a huge head start'

A new report reveals tradies earn more money than university graduates for a longer period of life.

While the financial position of tradies and degree holders was almost exactly the same by age 60, the research from Business and Economic Research Limited (BERL) showed those who enter the trades are, on average, in a better financial position for most of their lives.

The BERL report, commissioned by the Industry Training Federation, shows apprentices earn more, buy houses and contribute to KiwiSaver earlier than their peers with bachelor's degrees.

Rather than focusing solely on income, the research looked at net financial position over a person's lifetime.

The Industry Training Federation chief executive Josh Williams welcomed the findings, telling Morning Report it showed there's an incentive to earn and learn straight out of high school.

Mr Williams said going into the workforce early can help people secure a stronger financial position in life.

"Earning earlier gives you a huge head start."

Mr Williams pointed to shortages in the service, tourism and construction sectors and the increasing demand for aged care workers.

Although those jobs are not highly paid, Mr Williams said people might be better off for starting work early and not needing to take out a massive loan.

But Universities New Zealand executive director Chris Whelan said the research is 'misleading' for young people.

"It's is really telling a story around compound interest," Mr Whelan said.

"The report basically says the best option is live at home, live frugally, and never miss a KiwiSaver payment."

Mr Whelan said demand for unskilled jobs is starting to disappear.