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This study examines how relative income levels, and in particular the income returns to post-compulsory and higher education (education beyond age 16) for Māori compare to Non-Māori, and how they have changed over the 1986-1996 decade. The analysis focussing on the Māori population extends earlier research for the overall New Zealand population (Maani, 1994, 1996a, 1996b, 1997, 1999). The study utilises individual level data and 20% samples of the 1986 and 1996 Censuses of the Population. Statistical sample characteristics, restricted and unrestricted 'earnings function' estimates across ethnicity, and stability tests over time indicate that the Māori population was at a disadvantage in both 1986 and 1996 in terms of educational attainment, employment and income levels. While the returns to post-compulsory education were significant compared to no qualifications, the participation of Māori in post-compulsory education after a decade is still significantly less than the Non-Māori group, as more than 60% of Māori males and females in 1996 still had no school qualifications. The returns to education are greater for Māori compared to Non-Māori, despite lower attainment levels. This is primarily since Māori with no qualifications are relatively more disadvantaged with respect to Non-Māori than are Māori with qualifications. Given the link between educational attainment and income levels, the study shows that in 1996 Māori with 'no school qualification' were at a greater relative disadvantage than they were in 1986, with the income gap having narrowed at the tertiary education level, in particular for women.