Education groups say an OECD report shows more funding for poor schools and more courses for poorly-educated adults could improve the economy.
Photo: AFP
The report said growing income inequality would hurt economic growth and a lack of education among poor people was partly to blame.
The Government said it was already doing a lot to raise achievement in poor communities, but teacher unions, such as the PPTA, the NZEI and the Tertiary Education Union, said more could be done.
They said poor families needed higher incomes, and the Government needed to make it easier for the poorest 40 percent of people to get the education they need to improve their lives.
Economist with Business and Economic Research Ganesh Nana said the report showed a big part of the problem is that children do poorly at school if their parents had few qualifications.
"Lower income parents that have not succeeded in terms of education, that impact perpetuates down the generations.
"If we crack that then that removes the perpetuation of that inequality and the report finds that will move us to a higher level in terms of economic growth."
He said successive governments had been trying to address the problem.
Education Minister Hekia Parata said the Government was already doing a lot by spending millions of dollars on raising enrolment in early childhood education and improving children's performance at school.
Hekia Parata Photo: RNZ
But educators said more could be done.
President of the Post Primary Teachers Association Angela Roberts said the report arrived as the Government questioned the way it targeted funding to schools with disadvantaged students.
"This is really good timing because hopefully it will help to inform the discussion around equity funding, at the moment, the only nod we have to pushing back against inequality is the decile stuff."
But she said funding for schools was only part of the solution.
"You need wealth redistribution happening before the kids turn up at the school gate because you need to make sure that kids are ready to learn."
Massey University education professor John O'Neill said the report recommended more help for poorly-qualified adults.
"We're talking about just as strong an emphasis on education poorly educated parents as we are children of poorly educated parents and I think this is a significant of a step up in terms of the OECD call to action."
The secretary of the Tertiary Education Union Sharn Riggs said the Government needed to reverse cuts and restrictions that had made it harder for adults to study.
"There were a whole range of things that encourage people, but there are easy things like adult and community education were such a fantastic investment - that's just one example of where the Government could actually make such a significant difference by reversing some of the changes it made."
She said the Government needed to ensure the poorest 40 percent of the population could access the education they needed to improve their lives.
Gap between rich and poor growing - report
The report said the countries with the biggest increases in income gaps are New Zealand, Finland, Israel, Sweden, and America.
Its analysis showed inequality had a significant impact on a country's growth, and suggested New Zealand had lost 10 percentage points of economic growth as a result.
The report said policymakers need to be concerned about the bottom 40 percent of the population, and taxes and benefits are the best way to redistribute income.
OECD economist and report co-author Michael Förster said the long-held belief that there was an automatic trickle-down effect of wealth has proven not to be true.
"There needs to be more of a focus on the immediate redistributive effects which is basically taxes and transfers."
However, University of Auckland Professor Tim Hazeldine said the numbers in the report should not be taken seriously.
"I've looked at the working paper behind it and it's got all sorts of funny things in it, for example the three countries with the highest actual growth rates, the UK, Sweden and Finland, had the biggest increases in inequality, so I don't think we should put too much credence in those actual numbers."
"What I think is really interesting is that the OECD after decades of promoting policies that promote an increase in inequality have changed tact now and they're getting worried about it."
Dr Eric Crampton from the business think tank the New Zealand Initiative said there was a danger in over-reacting to the report's findings.
"I don't think the results are internally consistent, I don't think that the policy messages are consistent with the empirical basis and I think we've got a generalised problem in small countries that when a big international organisation puts out a report of whatever quality that mentions it we all like to jump up and down about it."
