Story: Income and wealth distribution

Page 4. Income distribution by gender, age and ethnicity

All images & media in this story

Gender

In 2006 about three-fifths of total income (before tax) was received by men, and two-fifths by women. In the 1950s women received less than one-fifth, but as they joined the paid labour force and equal pay was introduced (so women and men were paid the same for the same job) the gap diminished.

The gap remained in the 2000s because women:

  • were still less likely to work in the paid labour force than men
  • worked shorter hours
  • were in lower-paid jobs
  • lived longer in retirement.

The shares of income have been almost the same since 1991. Women have a higher share of total income than market income, because they get a higher proportion of social security benefits than of market earnings.

Age

In terms of age, low incomes are typical of teenagers and people in their early 20s, when many are still in education or training. Low incomes are also common among retired people. A big drop in income occurs after 60 when people stop working but do not have a private pension. At 65 everyone is entitled to New Zealand Superannuation, so the income of some individuals increases.

High incomes are typical of people aged 25 to 60 – as is a far greater degree of inequality of incomes.

The distribution of incomes among age groups does not necessarily represent the experience of an individual over a lifetime. As economic growth occurs, average real income levels increase regardless of a person’s age. Over a lifetime these small annual increases accumulate, so at retirement the average income for a person aged 60 may be 50–75% higher than it was when the person was 20. Also, a person may not be on the same track all their life. Some of those in the upper-income quartile as teenagers may have left school early without qualifications, and may remain on a low income for the rest of their life. Meanwhile a student who stays on at school and university may be in the lowest quartile at age 20 but rise to the top quartile when working.

Women tend to have a different pattern for income over their life from men, because they earn less (or nothing) in the years when they are bringing up children.

Total income does not include the effect of home ownership. Because many people pay off mortgages when they are younger, and have low housing outgoings when they are older, their effective disposable income is higher later in life than the figures may suggest.

Ethnicity

In the 2006 census, people who identified themselves as ethnically New Zealanders or European reported the highest incomes, followed by Māori, then by Pacific peoples. Those who identified themselves as Asian were the lowest (probably because they include a high proportion of visiting students).

Māori

The most reliable data source for Māori income, the census, uses different definitions in different censuses.

Those with a loose attachment to their Māori connections (such as those of Māori descent who don’t describe themselves as of Māori ethnicity) have higher incomes on average than those with stronger connections (such as those who describe themselves as of sole Māori ethnicity).

Māori women earn less than Māori men. However in relative income terms, Māori women’s earnings are closer to non-Māori women than Māori men are to non-Māori men.

There appears to be a closing of the income gap between Māori and non-Māori since the Second World War, but the convergence is very slow. It stagnated in the 1990s and possibly even reversed. The closing of the gap then resumed in the early 2000s.

How to cite this page:

Brian Easton, 'Income and wealth distribution - Income distribution by gender, age and ethnicity', Te Ara - the Encyclopedia of New Zealand, http://www.TeAra.govt.nz/en/income-and-wealth-distribution/page-4 (accessed 25 September 2017)

Story by Brian Easton, published 11 Mar 2010