It is common for young New Zealanders to spend a number of years overseas, during their late teens to early thirties. This period of overseas travel plays an important part in the lives of many by broadening their experience in life - especially important for relatively isolated countries such as New Zealand.
London's position as the default OE destination is probably a result of what historian James Belich calls 'recolonisation'. He describes how New Zealand developed very strong cultural ties to the United Kingdom, and London in particular, and as a result tended to see London as the centre of the universe and pay little attention to other places. In addition, British immigration law until the 1970s allowed New Zealanders to live and work in Britain as British citizens. The continuation of the trend may be residual recolonialism but in addition most New Zealanders have friends and often relatives in London, and its favourable working holiday scheme, proximity to the rest of Europe, and the fact that it is English-speaking also make Britain a desirable destination. In 2003 Prime Minister Helen Clark described the OE to Britain as "an important tradition for many New Zealanders"
The abbreviation OE is sometimes spoken as if it is a formal qualification - as in "do you have your OE?" - because before 2004 the top secondary school qualification was UE - "University Entrance". The phrase also indicates that the trip is considered to be an important milestone rather than something frivolous. Large numbers of New Zealanders live and work in Australia but this generally not considered to be an OE.