Explaining relative labour market outcomes for Maori and non-Maori

This study investigates the level of discrimination between non-Maori and Maori in the New Zealand labour force. Multinomial logit techniques and wage regression analysis are combined so as to decompose the wage differential into components explained by differences in productivity characteristics, job discrimination and wage discrimination. Evidence of both job discrimination and wage discrimination is found. Small sample sizes meant that part-Maori data could not be utilised. The lack of data also impacted on the reliability of the results from the Maori wage regressions. Therefore, the major policy implication from this paper is that more extensive and detailed sampling of minority ethnic groups be carried out so that informative and accurate analysis of labour market disparities can be obtained,UnpublishedAgresti, A. (1990), Categorical Data Analysis, New York: John Wiley & Sons. Alexander, W. R. J., Genc and M., Jaforullah, M. (2001), "Maori disadvantage in the labour market", Economics Discussion Papers, Department of Economics University of Otago, No. 0108. Banerjee, B. and Knight, J. B. (1985), "Caste discrimination in the Indian urban labour market", Journal of Development Economics, 17: 277-307. Blinder, A. S. (1973), "Wage discrimination: Reduced form and structural estimates", The Journal of Human Resources, 8(4): 436-455. Brown, R. S., Moon, M. and Zoloth, B. S. (1980), "Incorporating occupational attainment in studies of male-female earnings differentials", The Journal of Human Resources, 15(1): 1-28. Chapple, S. (1999), "Explaining patterns of disparity between Maori and non-Maori employment chances", Labour Market Bulletin, 1999: 70-100. Chapple, S. (2000), "Maori socio-economic disparity", paper for the Ministry of Social Policy seminar, Friday 15 September 2000, Ministry of Social Policy, Wellington. Chapple, S. and Rea, D. (1998), "Time series analysis of disparity between Maori and non-Maori labour market outcomes in the Household Labour Force Survey", Labour Market Bulletin, 1998(1 & 2): 127-144. Dixon, S. (1996), "The distribution of earnings in New Zealand", Labour Market Bulletin, 1996(1): 45-100. De Beyer, J. and Knight, J. B. (1989), "The role of occupation in the determination of wages", Oxford Economic Papers, 41: 595-618. England, P. (1992), Comparable Worth. Theories and Evidence, New York: Aldine De Gruyter. Gill, A. M. (1989), "The role of discrimination in determining occupational structure", Industrial and Labor Relations Review, 42(4): 610-623. Heckman, J. J. (1979), "Sample selection as a specification error", Econometrica. 47: 153-161. Hinks, T. and Watson, D. (2001), "A multinomial logit nondiscriminatory approach to estimating racial wage and occupational discrimination", Applied Economics, 33: 605- 612. Kirkwood, H. and Wigbout M. (1999), Exploring the gap. An exploration of the difference in income received from wages and salaries by women and men in fiill-time employment, Wellington: Statistics New Zealand. Maani, S. A. (2000), "Secondary and tertiary educational attainment and income levels for Maori and non-Maori over time", Treasury Working Paper, No. 00/18. Mare, D. (1995), "Examining labour market outcomes for Maori", Labour Market Bulletin, 1995(1): 116-123. Murnane, R. J., Willet, J. B. and Levy, F. (1995), "The growing importance of cognitive skills in wage determination", The Review of Economics and Statistics, 77(2):251 -267. NZPA (2001), "Average NZ household worse off now than 20 years ago", New Zealand Herald, pg A5. Oaxaca, R. (1973), "Male-female wage differentials in urban labor markets", International Economic Review, 14(3): 693-709. Oaxaca, R. L. and Ransom, M. R. (1994), "On discrimination and the decomposition of wage differentials", Journal of Econometrics, 61: 5-21. Ross, T. (2001), "Working it out: Employment summit called for", The Press, pg 9. SAS Institute Inc. (1989), SAS/STAT° User Guide, Version 6, Fourth Edition, Volume 1, Cary, NC: SAS Institute Inc. Schmidt, P. and Strauss, R. P. (1975), "The prediction of occupation using multiple logit models", International Economic Review, 16(2): 471-486. Winkelmann, L. and Winkelmann, R. (1997), "Determining the relative labour force status of Maori", Labour Market Bulletin, 1997(1): 24-62