Abstract
This paper examines recent changes in weekly income levels and dispersion for Māori, New Zealand’s indigenous ethnic group. Changes in the Māori income distribution between 1997 and 2003 reflect rapid increases in economic growth and employment rate. A reduced proportion of people had zero or benefit-level incomes and a higher proportion had high incomes. Income inequality declined for working-aged Māori and was stable for employed Māori. The average income gap between Māori and Europeans declined. The increased Māori employment rate during this period was the single most important driver of changes in the Māori income distribution.
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Notes
In 2001, 84% of Māori lived in urban areas, compared with 86% of all New Zealanders. About half of Māori adults who were married or partnered in 1996 had non-Māori partners (Callister 2003, unpublished paper; available at http://www.msd.govt.nz/events/conferences/social-policy-03/abstracts-papers-presentations/3.18.html).
In 2001, for example, the average gross weekly income of adult Māori was 77% of the average gross weekly income of adult Europeans. Australian Bureau of Statistics figures indicate that the median weekly gross income of indigenous peoples in 2001 was 59% of that of non-indigenous people. The average annual income of aboriginal peoples in Canada in 1995 was 62% of the figure for the non-Aboriginal population (Statistics Canada 2001, p.6).
The imputation methods are described in Dixon and Maré (2004).
The investment income figures that have been collected since 2002 show that investment income is a very small component of Māori weekly incomes. It is a more significant component of the weekly incomes of Europeans; therefore, the exclusion of investment income is likely to bias Māori-European income comparisons to some small degree.
The ‘optimal’ bandwidths for the main income distributions considered in this paper are as follows: 0.108 for all Europeans, 0.067 for employed Europeans, 0.135 for all Māori and 0.087 for employed Māori.
Whilst many respondents report their benefit income in after-tax terms, Statistics New Zealand converts these values to the pre-tax equivalent.
The modified weights and clustering information were supplied by Statistics New Zealand.
The 50–10 percentile difference is not defined because the 10th percentile was at zero in 1997–1998.
Note that non-employed Māori, on average, had much higher incomes than non-employed Europeans. This is almost certainly due to a higher level of benefit eligibility among Māori. Table 2 gives the proportion of each ethnic group with some benefit income in the survey reference week.
Or correlated with other unmeasured attributes that are differentially rewarded in the labour market.
The re-weighting could also be carried out using 2002–2003 as the base year and adjusting attributes to match their 1997–1998 distribution. This variation leads to slightly different results, but does not materially alter the patterns and effects reported here.
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Acknowledgements
This research was funded by the Foundation for Research, Science and Technology, and the financial support of the Foundation is gratefully acknowledged. Access to the data used in this study was provided by Statistics New Zealand under conditions designed to give effect to the security and confidentiality provisions of the Statistics Act 1975. The authors thank Robert Templeton and Jonathan Khoo for their valuable assistance with the calculation of sampling errors. They also thank Steven Stillman and three anonymous referees for their helpful comments on earlier drafts of the paper.
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Dixon, S., Maré, D.C. Understanding changes in Māori incomes and income inequality 1997–2003. J Popul Econ 20, 571–598 (2007). https://doi.org/10.1007/s00148-006-0083-x
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DOI: https://doi.org/10.1007/s00148-006-0083-x