Marianne Bertrand, laureate of the Jean-Jacques Laffont Prize 2019

Some basics on incidence of student loan relief

Labour proposes wiping 10% off of outstanding student loan balances for domestic borrowers that are not in arrears and who have not benefitted from fees-free study. That write-down will happen on 1 April.It proposes doing it again in 2031, and each year afterwards, for borrowers in good standing who have been NZ-based over the prior…

Some basics on incidence of student loan relief

Why did efficiency wages fall out of favour – AI explanation part 1

Compensating differentials

Post article overlooks REINZ chief’s thought about the REA’s treatment of Janet Dickson and the role of Maori culture

Bob Edlin writes –  After a year in the job as chief executive of the Real Estate Institute of New Zealand, Lizzy Fyley discussed a range of industry issues with The Post. One matter that was not addressed was the governance role of the Real Estate Authority in the light of its cancellation of Auckland […]

Post article overlooks REINZ chief’s thought about the REA’s treatment of Janet Dickson and the role of Maori culture

The gender wage gap is fading away

The gender wage gap has dropped by two-thirds in the last 30 years. It has halved since the first pay equity claim was filed 14 years ago. The gender wage gap is now barely 5.5% in June 2026 according to the recently released Statistics New Zealand data. It is a stretch to file pay equity claims asking for 30% more when the gender wage gap struggles to stay above 5%.

The gender wage gap data released by Statistics New Zealand recently is the raw data. There are no adjustments to that pay gap for differences in educational backgrounds, continuity of employment and dedication to demanding careers, unsocial hours, risk of injury, and the greater desire of women for work-life balance and jobs with more working from home options.

It is not mischievous to say that the gender wage gap may round down to zero once these factors are considered.

From time-to-time, detailed datasets become available on male and female workers that show that the gender wage gap goes down or close to zero. There are even detailed datasets where hiring and job assignments are made without any management intervention or possible bias.

There is a large gender wage gap driven by work-life balance under a bus and train drivers’ collective agreement in Massachusetts. The work-force was one-third female with hiring via a lottery among applicants with a clean record. Shifts are chosen by drivers strictly according to their seniority at each depot.

There was still a 11% gender wage gap because women drivers elected to work less overtime, they avoided overtime shifts on short notice, and they worked fewer shifts at nights and weekends. This gender wage gap among bus and train drivers cannot be the fault of their sexist employer because work was allocated by an exceptionally detailed union contract.

A 7% gender wage gap emerged even when a computer algorithm is allocating the work first come, first served.

A study of Uber drivers found a gender pay gap of zero once account is taken for male Uber drivers driving more at nights, weekends and in the more dodgy neighbourhoods with drinking establishments. Male Uber drivers also worked more hours per year which meant they had much more work experience than female Uber drivers. These additional hours meant men became more skilled in deciding when and where to best cruise for the best paying jobs. The fact that men drive faster explained the last two percentage points of the gender pay gap at Uber. Speed meant men were available for the next Uber job quicker.

The gender wage gap is just into the double digits for the top 10% of female earners in New Zealand in 2025 (see OECD graphic). This is because their chosen careers are often not family friendly. But even at the top end of town the gender pay gap has halved in the last 20 years.

OECD data explorer

Women’s willingness to trade work-life balance for lower wages and fewer promotions is a big driver of the gender wage gap and the channelling of women into family friendly occupations. The wages of men and women at all levels are similar in the years leading up to motherhood then everything changes.

Top American labour economist Claudia Goldin found that some careers severely penalise any time off such as for motherhood or working less than punishingly long or rigid hours. Goldin refers to these jobs as greedy jobs. Women’s preference for family friendly occupations that can pay less and a tendency to avoid greedy jobs will mean that the gender wage gap may always be with us at least at the big end of town.

Did the Sewing Machine Reduce the Workload for Women?

Is new technology that replaces a worker a good thing? We have a tendency, it seems to me, to believe that most previous inventions turned out to have overall net social benefits, but to be worried that all future inventions will instead have overall net social costs. Philipp Ager and Davide Coluccia tackle the question of…

Did the Sewing Machine Reduce the Workload for Women?

College-educated women have maintained stable marriage rates by partnering with high-earning non-college men, shrinking the pool of economically viable partners available to non-college women

See Gender Disparities in College Enrollment and Marriage Patterns by Clara Chambers, Benjamin Goldman & Joseph Winkelmann.”Over the past half-century, the gender composition of American college campuses has shifted from predominantly male to predominantly female. Today, 1.6 million more women than men attend four-year colleges in the US. Over the same time period, the economic status…

College-educated women have maintained stable marriage rates by partnering with high-earning non-college men, shrinking the pool of economically viable partners available to non-college women

Alex Tabarrok: Britain’s equal pay madness

New Zealand shows how to solve the equal pay crisis

Outgoing governments often try to craft a legacy for themselves by introducing policy traps that incoming governments find hard to undo, such as Rishi Sunak’s National Insurance cuts in 2024 or Gordon Brown’s introduction of the 50p top rate of income tax in 2010. Keir Starmer just did something similar by initiating a huge expansion in the […]

New Zealand shows how to solve the equal pay crisis

Occupational Licensing: US and International

The potential benefit of having the government require that certain jobs require an official license is quality control and protection. Personally, I rather like knowing that my nurse or doctor or dentist has gone through courses and training. The potential cost is that requirement to have a government license can become a way for those…

Occupational Licensing: US and International

The Equal Pay Madness Just Got Madder

In my post Equality Act 2010 I discussed the UK’s absolutely insane wage policy: In short, supply and demand have been replaced by judges and labor boards with the authority to deem which jobs are “equal” and therefore should be paid equally….No one is alleging that male and female warehouse workers were paid unequally or…

The Equal Pay Madness Just Got Madder

Typewriters and fertility

Workplace technological changes were instrumental in creating new tasks for women over the last century. This paper studies the adoption of the typewriter into US workplaces. Exploiting exogenous variation in typist demand across sectors, I document that the typewriter increased women’s labor force participation, leading to lower rates of marriage and fertility. These developments stemmed…

Typewriters and fertility

A weird way of slicing the stats

Ages ago I supervised a superb Honours thesis, which turned into a Masters, looking at the lesbian wage premium. It showed up regularly in the US data: homosexual women earned more than heterosexual women – the opposite of the pattern that obtains for men. I was curious whether the difference could in part be due to…

A weird way of slicing the stats

Europe’s War on Wealth

Given the relative economic weakness that plagues most European nations (documented here, here, here, here, and here), a top priority for policy makers should be to improve incentives for wealth creation. But that assumes politicians care about the prosperity of citizens. Based on a new report from the European Commission, the answer is no. Instead of […]

Europe’s War on Wealth

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