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

Michelle Gosse and Siva Ganesh

New Zealand Economic Papers, 2004, vol. 38, issue 1, 101-118

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.

Date: 2004
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DOI: 10.1080/00779950409544396

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