Research on the gender pay gap

The research report Empirical evidence of the gender pay gap in New Zealand  (led by Professor Gail Pacheco from AUT) tells us about the factors behind the gender pay gap and helps us focus our efforts. It is the first comprehensive update of the factors behind the national gender pay gap since 2003.

The research uses New Zealand Income Survey data from 2015. The sample size (13,737 respondents) allows for results of statistical significance to be produced and the multiple methods increase the robustness of the findings.

What does the research find?

The research finds that the great majority (80 percent) of the gender pay gap is now driven by harder to measure factors, like conscious and unconscious bias that impacts negatively on women’s recruitment and pay advancement, and differences in choices and behaviours between men and women. This is using the Oaxaca + correcting for selection bias technique (page 20 of the report).

The research finds that the proportion of the pay gap that is unexplained becomes larger and more significant for female employees on higher wages. For women on lower incomes, factors such as type of work, family responsibilities, education and age remain important.

The research also finds the relative size of the gender pay gap increases for female employees on higher incomes. There is a smaller gender pay gap between male and female employees on the lowest wages. The Ministry thinks a reason for this is that lower paid occupations have narrower pay bands and therefore less scope to pay men and women very differently. The gap widens to approximately 20 percent among those on the highest wages.

What else could be contributing to the “80 percent” finding?

The research found that 80 percent of the gender pay gap was “unexplained”. The Ministry for Women defines the unexplained portion of the gap as “unconscious and conscious bias, and differences in behaviours and choices between men and women”.

These differences in behaviours and choices could include men and women’s willingness to negotiate pay and conditions, for example, and whether employers may treat women differently from men when they do negotiate. For example, research from Australia found that while women are willing to negotiate for pay, men are more likely to get a pay increase when they negotiate.

The unexplained portion can also include any factors not captured in the data, such as differences in qualification types.

The research could not test for the effect of undervaluation of female-dominated occupations which can derive from historical or current gender discrimination.

Other research

A recent report Effect of motherhood on pay found there was a 17 percent pay gap between what mothers and fathers earn in the workforce. The report shows that pay gaps between mothers and fathers are only one contributor to the overall national gender pay gap.

You can also view the Pay Inequality between Men and Women in New Zealand, by Sylvia Dixon report from 2000.