9 Conclusions
Recent literature on ethnic differences in labour market outcomes in New Zealand points to two broad conclusions. Firstly, there are substantial differences in current labour force status. Maori are less likely to be employed and more likely to be unemployed relative to non-Maori. Secondly, there are negligible differences in wage rates among observationally equivalent workers. Employed Maori receive roughly comparable hourly earnings relative to employed non-Maori, once educational attainment and other demographic factors are held constant.
The present study looks at ethnic differences in early labour market experiences for a sample of youth born in the Canterbury area in 1977. These CHDS data provide important insight into the origin and nature of these early ethnic differences in labour market outcomes. Firstly, we have extensive information on the education, training and labour market histories of these youth up to their 21st birthdays. Unlike cross-sectional surveys, this allows us to construct a fairly comprehensive picture of the accumulation of work experience between the ages of 16 and 21. We ask whether this early accumulation of work experience varies between Maori and non-Maori. Secondly, we have access to an extensive catalogue of personal and family background histories for these youth. Unlike cross-sectional surveys, this allows us attribute at least some of the ethnic differences in labour market outcomes to measurable differences in individual and family circumstances. These data also allow us to consider in greater detail the important question of how ethnicity might be defined.
The specific findings of this analysis have already been set out in the summary preceding this conclusion. Two questions were posed in this project. Firstly, do Maori accumulate less work experience than non-Maori by age 21, and can these ethnic differences be explained by observable personal and family background characteristics? Secondly, do Maori face systematically lower wage rates in the labour market, and can these ethnic differences be explained by observable productivity and job-related factors?
We find that Maori, on average, accumulate less work experience than observationally equivalent non-Maori in the CHDS by age 21. Although detailed information on the personal and family background characteristics allows us to explain a larger portion of these ethnic differences in work histories, we are unable to account for the entire gap in work experience between Maori and non-Maori. We do know that these ethnic differences in work experience are largely relegated to mixed Maori (ie, individuals who identify with both Maori and non-Maori). We also know that this ethnic gap in work experience is even wider among individuals without school or post-school qualifications. The general disparities by ethnicity appear to be relegated to the most disadvantaged in society. Maori make up a much larger proportion of those who fail to acquire human capital through both education and training, and work experience.
Maori workers, on average, receive higher hourly earnings than non-Maori workers at age 21. This wage premium received by Maori is even larger in our regression analysis once we control for the fact that Maori have less actual work experience and fewer formal qualifications than non-Maori. There is no evidence in this study that Maori, regardless of current work status, face lower wages than non-Maori. Thus, any systematic disadvantage experienced by Maori would have to operate through the accumulation of work experience, and not through the wage rates they face in the labour market.
