8.1 Discussion of Results

The decompositions performed in this study produced a New Zealand Public Service gender pay gap of 16.61% for June 2000 and 15.5% for June 2001, based on the geometric means of the natural log of salary. 71% of the 2000 pay gap was due to male employees having more earnings power that dropped to 70% of the gap in 2001. These results need to be compared to the Human Resource Capability survey results to determine the extent of any bias introduced by the data cleaning used in this project. Using the arithmetic means of hourly salary, the pay gap was 16.95% for 2000 and 16.04% for 2001. These results also compare reasonably favourably to the gender pay gap reported in the two State Services Commission Human Resource Capability surveys of 19% for 2000 and 17% for 2001. To reiterate, this project used the Human Resource Capability survey datasets, although employees with missing information were removed from the decompositions. A large difference in the arithmetic means would suggest that the data cleaning process was biased.

Occupation had the largest effect on the gender pay gap, with more than 30% of the gap for both 2000 and 2001 arising from differences in the male and female participation rates in the different Public Service occupations, with males tending to work in higher paid occupations, and a further 28-29% attributable to a male earnings advantage within occupations. While this earnings advantage occurs once human capital factors such as age and tenure are taken into account, variables such as seniority within occupation were not analysed due to a lack of data. Given that male employees tended to have higher levels of human capital such as tenure, the male earnings advantage is suggestive of a tendency for male employees to be more senior than female employees within occupations, rather than male employees earning more at the same level of seniority in the same occupation.

While many people think of the New Zealand Public Service as a purely Wellington industry, one department is entirely domiciled in Auckland (Serious Fraud Office) and only five have all their staff based in Wellington (Crown Law Office, Ministry of Defence, the Treasury, Ministry of Women's Affairs, Ministry of Youth Affairs). There was little difference in the proportions of male and female employees working outside Wellington; however, there was an earnings advantage for women in these regions of almost 8% for each year. Given that the head offices of each department are in Wellington (apart from the Serious Fraud Office), that higher paid occupations tend to be in head offices rather than regional offices or sites, and that males have a higher share of the higher paid occupations, this regional finding suggests that much of the gender pay gap is produced by male and female employment differences in Wellington. In other words, occupations that contain proportionately more employees outside of Wellington - and have larger numbers of employees (such as customer services officers) - are more likely to pay women a relatively higher salary. These may also be occupations where human capital factors - such as age - have relatively lower impact on salary.

Finally, an individual employment agreement was associated with an earnings advantage for men (10.4% in 2000, 9.4% in 2001) even though similar proportions of males and females were on individual employment agreements. This effect is independent of occupation, employer, region, tenure, and age. This finding suggests that individual employment agreements provide better working conditions for male employees.

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