4  Women’s participation in New Zealand

4.1  Previous research

Empirical labour supply research tests and quantifies the relationships assumed in labour models (Section 2.1), using multivariate statistical models. There is a very substantial international literature on women’s labour supply as surveyed, for example, in Killingsworth and Heckman (1986). New Zealand studies of women’s labour supply have been undertaken by Kalb and Scutella (2003a, 2003b), Winkelmann and Winkelmann (1997, 1998), Maloney (2000), Prebble and Rebstock (1992), Harris (1992), Poot and Siegers (1992), Brooks (1991), Lloyd, Fergusson and Horwood (1989, 1990), Ross (1987), and Hyman (1979).[9]

Most of these New Zealand studies have poor data, or no data at all, on wages and non-labour income, and many have had to rely on aggregated, rather than unit record, data. With the exception of Kalb and Scutella (2003a, 2003b), the data used in these studies is over a decade old. However, despite differences in quality, scope, and time period, the New Zealand studies are remarkably consistent in identifying those personal, family and economic characteristics which are independently associated with, and may help to predict, women’s labour force participation. Being married, having children (especially young children), being a sole parent, and having low qualifications are all associated with lower participation rates.[10] Age is also a persistent factor, with a number of studies finding that the highest participation rates are in the middle age groups. A number of studies also find that the local unemployment rate, which is a measure of labour demand, affects women’s participation: women in areas of high unemployment simply give up looking for work. The number of children in a family, on the other hand, seems to make little difference to women’s participation.

Winkelmann and Winkelmann (1998) establish that immigrants, especially from non-English speaking countries, have lower participation rates than people born in New Zealand, even when taking demographic and family factors into account. The effect of having Maori ethnicity is less clear. The best study of Maori/non-Maori differences in participation is again by Winkelmann and Winkelmann (1997). They find that the demographic and family factors mentioned above explain, depending on the Census year used, between 78% and 95% of the difference in participation rates between Maori and non-Maori women. Ethnicity (or an unobserved characteristic which is correlated with ethnicity) appears to have only a modest independent effect on women’s participation.

Those New Zealand studies which consider the effect of wages and other income generate results which suggest (as predicted by labour supply theory) that the greater the wages a woman can earn in employment, the more likely she is to be participating; conversely, the more income her family receives from other means, the less likely she is to be participating. Maloney (1997) and Prebble and Rebstock (1992) also find that a higher replacement rate (the ratio of what a person could receive on a benefit and the amount they could receive in paid employment) is associated with lower participation.

In what follows in this chapter, a simple picture of women’s participation is developed using data from the 2001 Census. Groups of women are distinguished according to the key demographic and family factors identified in the New Zealand labour supply studies—the age of the women, qualifications, the presence and age of children, and whether the women are sole or partnered mothers.