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IZA Discussion Paper No. 18275
November 2025
Ethnic Wage Differences in Aotearoa New Zealand
David C. Maré, Thomas Benison

Ethnic wage gaps are a substantial and persistent issue in New Zealand. Understanding the drivers of such gaps is key to understanding the economic, social, and institutional factors that contribute to labour market inequality and to identifying measures to reduce gaps. Using household survey data from 2009 to 2023, this study implements a version of the Oaxaca-Blinder decomposition method to examine the sources of ethnic wage gaps in New Zealand. Our results confirm the pattern of disadvantage previously documented for non-European ethnic groups. Differences in demographic, educational, and job characteristics account for substantial portions of the wage gaps for M?ori, Pacific, and European groups. After accounting for differences in mean characteristics, sizeable wage gaps remain, providing insight into the degree of ethnic labour market disadvantage that is due to unobservable characteristics or broader systemic factors.

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Olga Nottmeyer
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+352 585-855-501
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Christina Gathmann
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The IZA@LISER Network is a global community of scholars dedicated to excellence in labor economics and related fields, now coordinated at the Luxembourg Institute of Socio-Economic Research (LISER) following its transition from Bonn.

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