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Firm productivity and ethnic wages

Author

Listed:
  • David C. Maré

    (Motu Economic and Public Policy Research)

  • Richard Fabling

    (Motu Economic and Public Policy Research)

Abstract

We estimate relative wage discrimination for ethnic and migrant groups in New Zealand, using linked employer-employee and firm-level productivity data, and comparing each group's contribution to output with their share of their firm's wage bill. We find that wage discrimination is relatively favourable for European migrants and Asian/MELAA employees, and relatively unfavourable for Māori, Pacific, and NZ-born European employees, with variation across NZ-born, recent migrants, and longer-term migrants. We present pooled and firm-fixed effects estimates of discrimination, highlighting distinct within-firm and between-firm patterns.

Suggested Citation

  • David C. Maré & Richard Fabling, 2025. "Firm productivity and ethnic wages," Motu Working Papers 25_08, Motu Economic and Public Policy Research.
    • Handle: RePEc:mtu:wpaper:25_08
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    References listed on IDEAS

    as
    1. Thomas Benison & David C. Maré, 2025. "Ethnic wage differences in Aotearoa New Zealand," Motu Working Papers 25_06, Motu Economic and Public Policy Research.
    2. Stephan Kampelmann & François Rycx, 2016. "Wage discrimination against immigrants: measurement with firm-level productivity data," IZA Journal of Migration and Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 5(1), pages 1-24, December.
    3. Isabelle Sin & Steven Stillman & Richard Fabling, 2022. "What Drives the Gender Wage Gap? Examining the Roles of Sorting, Productivity Differences, Bargaining, and Discrimination," The Review of Economics and Statistics, MIT Press, vol. 104(4), pages 636-651, October.
    4. Richard Fabling & David C Maré & Philip Stevens, 2022. "Migration and firm-level productivity," Working Papers 2022/01, New Zealand Productivity Commission.
    5. François Rycx & Stephan Kampelmann, 2016. "Wage Discrimination against Foreigners. Measurement with Firm-level Productivity Data," ULB Institutional Repository 2013/245651, ULB -- Universite Libre de Bruxelles.
    6. Judith K. Hellerstein & David Neumark, 2007. "Production Function and Wage Equation Estimation with Heterogeneous Labor: Evidence from a New Matched Employer-Employee Data Set," NBER Chapters, in: Hard-to-Measure Goods and Services: Essays in Honor of Zvi Griliches, pages 31-71, National Bureau of Economic Research, Inc.
    7. Cristian Bartolucci, 2014. "Understanding the Native–Immigrant Wage Gap Using Matched Employer-Employee Data," ILR Review, Cornell University, ILR School, vol. 67(4), pages 1166-1202, October.
    8. Hellerstein, Judith K & Neumark, David & Troske, Kenneth R, 1999. "Wages, Productivity, and Worker Characteristics: Evidence from Plant-Level Production Functions and Wage Equations," Journal of Labor Economics, University of Chicago Press, vol. 17(3), pages 409-446, July.
    9. Christensen, Laurits R & Jorgenson, Dale W & Lau, Lawrence J, 1973. "Transcendental Logarithmic Production Frontiers," The Review of Economics and Statistics, MIT Press, vol. 55(1), pages 28-45, February.
    10. Richard Fabling & David C Maré, 2015. "Addressing the absence of hours information in linked employer-employee data," Motu Working Papers 15_17, Motu Economic and Public Policy Research.
    11. Thomas Benison & David C. Maré, 2025. "Ethnic wage differences in Aotearoa New Zealand," Motu Working Papers 25_06, Motu Economic and Public Policy Research.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    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
    • J42 - Labor and Demographic Economics - - Particular Labor Markets - - - Monopsony; Segmented Labor Markets

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