Wage Structures and Employment Outcomes in New Zealand, and Their Relationship to Technological Change

Abstract

After 100 years at an historically low level, inequality began to rise in the late 20th century, a trend which was especially marked in the English-speaking countries including New Zealand. Various explanations have been advanced, but internationally the most favoured theory is skill-biased technological change, driven by the new information and communication technologies. This thesis used income and wage data from the New Zealand Population Census and the New Zealand Income Survey to examine wage trends between 1991 and 2004. As in other developed countries wage dispersion was increasing in the 1990s, though it appears to have slowed since 2001, and the increased inequality is strongly correlated with workers' skills and qualifications. There is also a correlation between new technology and earnings inequality, but this appears to be attributable to the demand for skills in the industries which are changing fastest, rather than anything intrinsic to the new technology.