Using recent data, and a variety of econometric techniques, this study examines the gender pay gap in New Zealand (NZ). The need for this study arises as the information that is regularly cited on the pay gap (based on average or median earnings for males and females) does not control for differences in individual, household, occupation, industry or other job characteristics, and there has been a lack of robust analysis in NZ, based on data post-2003. The research finds that traditional drivers such as type of work, family responsibilities, education, and age no longer explain the majority of
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Using recent data, and a variety of econometric techniques, this study examines the gender pay gap in New Zealand (NZ). The need for this study arises as the information that is regularly cited on the pay gap (based on average or median earnings for males and females) does not control for differences in individual, household, occupation, industry or other job characteristics, and there has been a lack of robust analysis in NZ, based on data post-2003. The research finds that traditional drivers such as type of work, family responsibilities, education, and age no longer explain the majority of the gender pay gap. In fact, around 80 per cent of the gender pay gap is now due to 'unexplained' factors, which the Ministry views primarily as behaviour, attitudes, and assumptions about women in work, including unconscious bias. Of particular note is the impact of the increase in women's qualifications between 2003 and now. Women's higher levels of qualifications should be reducing the gender pay gap. However, the research suggests that these qualifications are not fully reflected in wages.
Key findings: Firstly, regardless of approach undertaken (e.g. parametric or semi-parametric) or whether or not we correct for selection into the labour force – the majority of the gender pay gap remains unexplained. The proportion of the average gap that is unexplained ranges from 64.4 per cent to 83.4 per cent. Secondly, the size of the average gap ranges from 12.0 to 12.7 per cent, indicating that the gender pay differential hasn't narrowed in the last decade. Finally, the size of the gap depends heavily on the location in the wage distribution – with clear evidence of little to no gaps at the bottom of the distribution, and large gender pay penalties (of approximately 20 per cent) at the top end of the distribution. This is clear evidence pointing to a glass ceiling effect in NZ.
Excerpts from publication.
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