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Ethnic wage differences in Aotearoa New Zealand

Author

Listed:
  • Thomas Benison

    (Motu Economic and Public Policy Research)

  • David C. Maré

    (Motu Economic and Public Policy Research)

Abstract

Ethnic wage gaps are a substantial and persistent issue in New Zealand. Understanding the drivers of such gaps is key to understanding the economic, social, and institutional factors that contribute to labour market inequality and to identifying measures to reduce gaps. Using household survey data from 2009 to 2023, this study implements a version of the Oaxaca-Blinder decomposition method to examine the sources of ethnic wage gaps in New Zealand. Our results confirm the pattern of disadvantage previously documented for non-European ethnic groups. Differences in demographic, educational, and job characteristics account for substantial portions of the wage gaps for Māori, Pacific, and European groups. After accounting for differences in mean characteristics, sizeable wage gaps remain, providing insight into the degree of ethnic labour market disadvantage that is due to unobservable characteristics or broader systemic factors.

Suggested Citation

  • Thomas Benison & David C. Maré, 2025. "Ethnic wage differences in Aotearoa New Zealand," Motu Working Papers 25_06, Motu Economic and Public Policy Research.
    • Handle: RePEc:mtu:wpaper:25_06
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    References listed on IDEAS

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    Cited by:

    1. Maré, David & Alimi, Omoniyi, 2026. "Intergenerational Earnings Persistence Across Ethnicities," IZA Discussion Papers 18422, IZA Network @ LISER.
    2. David C. Maré & Richard Fabling, 2025. "Firm productivity and ethnic wages," Motu Working Papers 25_08, Motu Economic and Public Policy Research.
    3. David C. Maré & Richard Fabling, 2025. "Firms and ethnic wage differences," Motu Working Papers 25_07, Motu Economic and Public Policy Research.

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    Keywords

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    JEL classification:

    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing

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