Data for the Census years 1986, 1991 and 1996 show that Maori-non-Maori differences in employment and unemployment rates increased over the ten-year period. In search for a possible explanation, multinomial logit models are estimated with unit record data in order to control for changes in socio-economic and demographic factors such as age, qualification, and family and parental situation. The analysis shows that the Maori-non-Maori differences in employment (unemployment) that are explained by the multinomial logit models decreased from 51% (43%) in 1986 to 38% (34%) in 1996. Two potential contributors for declining relative labour market outcomes of Maori men are identified: increasing returns to skills and changes in the sectoral composition of the workforce.