Understanding Changes in MāOri Incomes and Income Inequality 1997-2003

Abstract

This paper reports findings from a study of changes in Māori income levels and income dispersion between 1997 and 2003. Data from Statistics New Zealand's Income Survey are used to describe and evaluate the main changes in the Māori income distribution in this period, which was marked by substantial increases in employment rates and improvements in the skill levels of working-aged Māori. A parallel analysis of the main changes in the European/Pākehā income distribution is provided for comparative purposes. The results show significant reductions in the proportion of Māori with no weekly income in the reference week, or incomes of $150-200 a week, and significant increases in the proportion with incomes above the peak income level of approximately $550 per week. Income inequality within the total working-aged Māori population declined, while income inequality among employed Māori was stable. An analysis of some of the key factors contributing to change in the income distribution suggests that the transition of many Māori into employment during this period was the single most important driver of change.

Keywords: Individual income distribution, Inequality, Māori, Kernel density estimation

JEL Classification: D31, J15