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This study uses data from the Christchurch Health and Development Study to investigate differences by ethnicity in early labour market experiences of a birth cohort born in Christchurch in 1977. The study finds that Maori youth acquire fewer school and post-school qualifications, and accumulate less work experience by age 21, than other youth. There is also more heterogeneity among Maori than other youth – a substantially larger proportion of Maori youth, compared to others, accumulate very little time in these productive activities. Even though measured background factors are important in explaining the relatively lower accumulation of work experience by Maori, they do not explain the entire ethnic gap in labour market outcome. However, in multivariate analyses, Maori ethnicity has an insignificant, though negative effect on work experience.
At age 21, Maori workers in this study (which is not nationally representative) on average receive higher hourly earnings than non-Maori workers, though this difference is not statistically significant. Once differences in other characteristics are taken into account, particularly educational qualifications and work experience, which have a positive effect on earnings, the earnings difference between Maori and non-Maori is statistically significant. This may be due to other unobserved differences between Maori and non-Maori who are employed, that also have an effect on earnings.
This research was supported by funding from the New Zealand Treasury. I am grateful for the helpful comments of referees on earlier drafts of this report. All remaining errors in this working paper are solely my responsibility.
The views expressed in this Working Paper are those of the author(s) and do not necessarily reflect the views of the New Zealand Treasury. The paper is presented not as policy, but with a view to inform and stimulate wider debate.
Table of Contents
- 1 Introduction
- 2 Recent literature on ethnic disparities in labour market outcomes in New Zealand
- 3 An analytical framework
- 4 Data issues and descriptive statistics
- 5 Regression results on actual work experience by age 21
- 6 Regression results on hourly earnings at age 21
- 7 Endogenous regressors in the experience and wage regressions
- 8 Summary
- 9 Conclusions