The gender pay gap and the importance of job size: Evidence from the New Zealand public service

Abstract

This study examines the gender pay gap in the New Zealand Public Service in 2002, using the well‐known Blinder‐Oaxaca method to decompose pay differentials into explained and unexplained components. The major innovation of the paper is its introduction of a ‘job size ‘ variable which proxies the seniority level of individual jobs, to supplement the standard variables such as occupation, age, tenure and ethnicity. The addition of job size to the model dramatically reduced the adjusted or unexplained gender pay gap to an almost negligible amount of 1.1 percent, and was the primary explanatory factor in pay differentials. The results suggest that, within the New Zealand Public Service, the gender pay gap is due to the horizontal and vertical segregation of female employees into lower paid occupations and jobs. Both sources of disparity will need to be addressed to remove the gap.

Notes

Michelle Gosse is a Senior Research Officer, Road Policing Support, New Zealand Police. The research reported in this paper was performed in her previous role as Advisor, State Services Commission. Siva Ganesh is a Senior Lecturer, IIST (Statistics), Massey University, New Zealand. Author for contact is

Michelle Gosse, [email protected]. The authors thank two referees and the Editor for useful comments on earlier drafts.