Factors explaining the low income return for education among Asian New Zealanders

Abstract

Aotearoa New Zealand has a long and rich history of migration from Asia, but this is also a history fraught with social and political tensions. Asians comprised around 10% of the usually resident population in 2006 (Statistics New Zealand, 2008) and were listed as the fastest growing ethnic group in the most recent National Ethnic Population Projections to 2026 (Statistics, 2010). Asians have double the prevalence of Bachelor’s degrees of any other large ethnic group in New Zealand. For people of all ethnicities, educational attainment is positively associated with income, but in all qualification categories at the 2006 Census, Asian New Zealanders were earning markedly less than their European, Māori or Pacific Islander counterparts. As a clearly important part of Aotearoa’s cultural landscape, any inequalities faced by this group should be of interest to the wider community. This investigation uses relevant variables available in the 2006 New Zealand Census of Populations and Dwellings to create explanatory models that investigate the factors related to this anomalous difference. These models find that being born in New Zealand is of ​​the single most importance in determining income, with Asians born in New Zealand receiving average incomes in line with the population average. Other factors of importance are languages spoken, age of arrival in Aotearoa, and years of residence in New Zealand. If, for each ethnicity, the proportions of individuals in each group within these variables were the same as the population, the income gap closes to $2,000 per year from almost $15,000 between Europeans and Asians, with Asian New Zealanders the second highest earning ethnicity group, and Māori and Pacifica also closing the gap with Europeans. The high level of migrants is shown to be the largest factor explaining the low income return for education for Asian New Zealanders.