Sources of the Gender Wage Gap in a New Zealand Birth Cohort

Abstract

The gender wage gap is a well-established finding that has been observed in a range of different societies. This paper examined the sources and composition of the gender wage gap in a New Zealand birth cohort of 30 year-olds. Prior to adjustment for explanatory variables, male wages were 38.0 per cent higher than female wages. After adjustment for human capital endowments, job characteristics and family responsibilities, there remained an unexplained gender wage gap of 11.5 per cent. Decomposition of the gender wage gap revealed that 66.4 per cent of the total gender wage gap could be explained by gender differences in human capital, job characteristics and family factors. These results suggest that, even after accounting for gender differences in a wide range of explanatory variables, males continue to earn significantly higher wages than females.