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Education and Maori Relative Income Levels over Time: The Mediating Effect of Occupation, Industry, Hours of Work and Locality

Listed author(s):
  • Sholeh A Maani


    (The University of Auckland)

Registered author(s):

    This paper examines ethnic differences in the relationship between educational attainment and income in New Zealand over the period 1986 to 1996. In particular, it uses a 50% sample from the Census in each of those years to determine how far ethnic differences in income are explained by educational qualifications, access to higher paying occupations and industries, hours of work, locality of residence and marital status. The study is restricted to all those employed. Over the period under study, the gap between Maori and European incomes increased. This reflects Maori lower educational qualifications and concentration in occupations and industries that experienced low employment growth at a time when income returns to educational qualifications increased. Those with higher educational qualifications also experienced growth in hours of work, reflecting increasing demand for skills. Nevertheless income returns to qualifications were higher for Maori than for non-Maori in both years. This reflects the particular and increasing disadvantage faced by Maori with no qualifications compared to Europeans with no qualifications and the fact that the gap between mean incomes of Maori and Europeans reduces as qualifications rise. Maori participation in higher education increased strongly over the period. Controlling for a wide range of characteristics, Maori residing in rural areas are more disadvantaged than any other group. Maori are also less likely to be married. Not being married is associated with lower incomes for males. By 1996 there was little difference among ethnic groups in access to managerial and professional occupations for people with higher educational qualifications. Overall, most of the ethnic gap in incomes can be explained by differences in the characteristics of the groups, rather than by differences in the way in which these characteristics are translated into income.

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    Paper provided by New Zealand Treasury in its series Treasury Working Paper Series with number 02/17.

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    Length: 47 pages
    Date of creation: Sep 2002
    Handle: RePEc:nzt:nztwps:02/17
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    New Zealand Treasury, PO Box 3724, Wellington, New Zealand

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    1. Daly, Anne, 1993. "The Determinants of Employment for Aboriginal People," Australian Economic Papers, Wiley Blackwell, vol. 32(60), pages 134-151, June.
    2. Henry W. Herzog, Jr, 1997. "Ethnicity and Job Tenure in a Segmented Labour Market: The Case for New Zealand," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 30(2), pages 167-184.
    3. Oaxaca, Ronald, 1973. "Male-Female Wage Differentials in Urban Labor Markets," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 14(3), pages 693-709, October.
    4. Jere R. Behrman & Nancy Birdsall, 1987. "Comment on "Returns to Education: A Further International Update and Implications"," Journal of Human Resources, University of Wisconsin Press, vol. 22(4), pages 603-606.
    5. Ronald L. Oaxaca & Michael R. Ransom, 1999. "Identification in Detailed Wage Decompositions," The Review of Economics and Statistics, MIT Press, vol. 81(1), pages 154-157, February.
    6. Chapman, B.J., 1988. "An Economic Analysis of the Higher Education Contribution Scheme of the Wran Report," Economic Analysis and Policy, Elsevier, vol. 18(2), pages 171-188.
    7. Borland, Jeff, 1999. "Earnings Inequality in Australia: Changes, Causes and Consequences," The Economic Record, The Economic Society of Australia, vol. 75(229), pages 177-202, June.
    8. McNabb, Robert & Richardson, Sue, 1989. "Earnings, Education and Experience: Is Australia Different?," Australian Economic Papers, Wiley Blackwell, vol. 28(52), pages 57-75, June.
    9. Nevile, J W & Saunders, Peter, 1998. "Globalization and the Return to Education in Australia," The Economic Record, The Economic Society of Australia, vol. 74(226), pages 279-285, September.
    10. David Neumark, 1988. "Employers' Discriminatory Behavior and the Estimation of Wage Discrimination," Journal of Human Resources, University of Wisconsin Press, vol. 23(3), pages 279-295.
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