Gender and Ethnicity in the Labour Market Participation Decision

At its simplest, the labour market participation decision for each individual amounts to a choice between “participating” and “not participating”. Having decided to participate, one either finds a job and is “employed” or (according to the standard internationally-accepted definition) is “unemployed” if one maintains a strong attachment to the labour force by actively seeking work and remaining available for work. Those in work may not be participating to the extent they desire in terms of hours worked. Why the participation decision is important for the individual is clear. It affects one’s access to economic resources and, to a large extent, determines one’s standard of living. From society’s perspective, the individual’s ability truly to exercise a choice is bound up with the principle of equity. Moreover, the aggregate participation rate, particularly of prime-age individuals affects the average standard of living and the productivity level needed to improve that standard. Our focus here is on gender and ethnic differences in participation outcomes amongst prime-age individuals or, more fundamentally, whether any differences can be explained by individual characteristics or whether there are some remaining inequities. y. In particular, we have quantified the effect of children of both pre-school and school age on the participation decision of prime-age individuals. Controlling for other factors, that effect, as expected, varies substantially by gender, but also strongly by ethnicity. Women classified of other ethnicity (i.e. not Pakeha, not Maori and not Pacifica) have the strongest tendency to withdraw from the labour force to care for young children. Married men tend not to vary their labour market behaviour. Marriage, in general, increases labour force attachment, as does a higher level of formal qualifications.