The key result for Pacific males and
females in Table 3 is that just under
half of the pay gap with Europeans is
explained. This is after controlling for a
wide variety of contributing factors.
Finally, for Asian, the standout result in Table 3 is
that educational differences explain greater than
100 percent of the pay gap with Europeans. This
is signalling that despite Asians on average having
higher educational attainment levels on average,
they are not receiving the return to that skill level
at the same rate as their European comparators.
Next, Table 4 adjusts the results for sample
selection bias. Importantly, the patterns described
in Table 3 generally hold, particularly in terms
of the relative importance of the contributing
domains to the explained proportion of pay gaps.
For example, it still stands that differences in
individual and job-related characteristics are the
main contributors to the pay gap for Māori males;
while differences in education and job-related
characteristics are the primary contributors to the
pay gap for Māori females.
For both Māori and Pacific, after adjusting for
sample selection bias, the proportion of the
respective pay gaps that can be explained has
fallen. For Māori, it ranges between 70 and 73
percent that can be explained, dependent on
gender. For Pacific, the explained proportion
is now a meagre 27 percent for males and 39
percent for females. As was the case in Table 3
as well, differences in job-related characteristics
are an important contributor to the explained
component; and for Pacific females in particular
– differences in educational attainment with their
European counterparts.
Table 4: Oaxaca decomposition with adjustment for sample selection bias
Variable
Māori
Pacific
Asian
Male
Female
Male
Female
Male
Female
19.03
11.71
24.27
14.76
13.90
8.19
70.37***
72.77***
27.07***
38.55***
-22.12***
-21.36*
Individual
27.77***
13.95***
15.99*
36.80***
-0.16
-86.93**
Education
14.98***
35.52***
27.01***
65.23***
74.57***
117.49***
5.92*
6.42***
-50.95***
-87.42***
64.03***
142.31***
Job-related
51.33***
44.11***
107.95***
85.40***
-38.44**
-72.87***
Sample size
5,160
5,592
4,737
5,067
5,499
5,748
Hourly pay difference (%)
Explained (% of difference)
Explained
Region
Note: Variable categories correspond to domains in Table 1. *, **, and *** denote significance at the 10%, 5%, and 1% levels
respectively.
Empirical analysis of Pacific, Māori and ethnic pay gaps in New Zealand
10