Pay gaps – an $18 billion a year issue

[Note amended October 2023 and version two (providing an updated estimate of $20 billion) created December 2025]

Different pay rates
For gender and ethnic groups
Add up to a lot!

These notes estimate the aggregate size of gender and ethnic pay gaps in Aotearoa New Zealand.

The first version of the note provides estimates in 2023; the second version provides estimates in 2025. The second version of the note has the numbers (and descriptions of the data) updated to reflect more recent data. The text is largely unchanged in the second version.

In 2023, we estimated the gender pay gap amounts to $7.6 billion per year, or 5% of wages and salaries. In 2025, we estimated the gender pay gap as amounting to $7.8 billion per year, or 4% of wages and salaries.  

In 2023, gender and ethnic pay gaps combined represented $17.6 billion per year, or 11% of wages and salaries. In 2025, that estimate rose to $20.0 billion per year, or 11% of wages and salaries.  

The notes also discuss recent research identifying the contributions of gender and ethnic differences in personal and job characteristics, and point to the important role of within-firm pay gaps.

Citation

Dave Maré. 2022. “Pay gaps – an $18 billion a year issue". Motu Research Note 45. Motu Economic and Public Policy Research. Wellington, New Zealand.

Dave Maré. 2025. “Pay gaps – an $18 billion a year issue". Motu Research Note 45v2. Motu Economic and Public Policy Research. Wellington, New Zealand.