The Gender Wage Gap in Paid- and Self-Employment in Australia

This paper presents an analysis of the gender wage gap in the highly regulated Australian labour market. It compares wage outcomes in the wage and salary sector with those for the self-employed. Comparisons with the United States are provided. The large gender pay gap in self-employment suggests that the aggregate gender wage differential will not be eliminated solely through wage determination for wage and salary earners. The greater gender wage gap in the self-employed sector may reflect liquidity constraints that are more difficult for self-employed women to overcome relative to self-employed men. The comparisons with the United States suggest that women will experience deterioration in relative earnings as the Australian labour market is deregulated.     

The Persistence of the Female Wage Disadvantage

Studies of the Australian labour market during the 1980s reported that the gender wage differential narrowed. However, a different story emerged during the 1990s when the gender pay gap persisted. A large part of the pay gap is attributable to different 'treatments' of men and women in the labour market. This article examines whether the female wage-disadvantaged state is a temporary or permanent phenomenon. The results show that while there is some mobility in the female wage distribution, there also exists a high degree of stickiness. It is argued that the wage-disadvantaged state for females is generally not a temporary phenomenon.     

How Women Are Faring in the Australian Labour Market

The Economic and Social Outlook Conference that was held in 2011 carried a separate session on the role of women in the Australian labour market for the first time. Women now make up some 45 per cent of the workforce—in the late 1970s, the proportion stood at one‐third. While women play an increasingly more important role in the labour market, the gap between male and female earnings has shown stubborn persistence, at around 15 per cent. Various explanations include productivity‐related characteristics and the changing age profile of the female workforce. For low‐paid workers, these explanations are convincing; for high‐paid workers, both in the public and private sector, the pay gap remains unexplained.     

Gender Pay Equity and Comparable Worth in Australia: A Reassessment

The Australian labour market is characterised by a persistent earnings differential between men and women. This article examines the contribution made by gender-based occupational segmentation to that gap using data from the 1993 Survey of Training and Education. It is estimated that occupational segmentation is responsible for between 3.9 and 4.9 percentage points of the earnings differential when measured across all employees. The comparable range after excluding managerial employees, however, is only 2.1 to 3.6 percentage points. Finally, the importance of segmentation for the gender earnings gap is found to be directly correlated with age, suggesting the intriguing possibility that the occupation-based inequity in pay will work itself out over time. That said, other explanations for this age effect also exist.     

The Contribution of Intermittent Labour Force Participation to the Gender Wage Differential*

Despite equal pay decisions in 1969 and 1972 a gender wage differential of around 15 per cent exists in 1990. This paper uses information on the number of years worked from the 1984 National Social Science Survey to provide an understanding of the role of intermittent labour force participation in the wage determination process in Australia. Differences in years worked between males and females are shown to account for approximately 40 per cent of the gender wage gap. The analyses also reveal that males receive higher returns for each additional year of schooling than females     

Gender differences in self‐employment

This paper examines the factors that influence transitions into self‐employment, paying particular attention to gender differences. We find that: (i) men are more responsive to the wage differential between wage/salaried employment and self‐employment; (ii) liquidity constraints are more important for men; and (iii) the link between father's self‐employment status and the probability of self‐employment is stronger for men. Taken together, these results suggest that, for women, self‐employment is a closer substitute for part‐time work and labour‐market inactivity than it is for men. We attribute such differences to the different labour market opportunities and occupational strategies of women.     

HAS NEW ZEALAND'S EMPLOYMENT CONTRACTS ACT INCREASED EMPLOYMENT AND REDUCED WAGES?*

The Employment Contracts Act 1991 substantively altered the structure of the industrial relations system in New Zealand. This study estimates the effects of this legislation on employment levels and average hourly earnings in this country using disaggregate industry level data from 1986(1) to 1996(2). In the five years following the enactment of the ECA, nonagricultural union membership declined from 49.5 to 27.2 per cent of the work force. This is an important consideration because our regression analysis suggests that this decrease in unionisation is solely responsible for any effects of the ECA on the labour market. Full-time equivalent employment grew by 14.2 per cent between 1991(2) and 1996(2). At least 2.3 percentage points of this employment growth can be attributed to this legislation. If the ECA was partly responsible for the recent economic recovery, then more of this employment growth could be credited to this act. There are two basic reasons why the ECA might have increased employment over the past five years. It could have lowered hourly earnings, or increased effective labour demand. Estimates of a reduced-form wage equation and a structural labour demand function both point to the latter explanation. Since there is no statistical evidence that ECA reduced hourly earnings, falling unionisation must have increased effective labour demand.     

Occupational Status: Why do some Workers Miss Out?

The difference in socioeconomic status between the 'haves' and 'have-nots' is widening in the Australian labour market. This is reflected in the data on both earnings and occupational status. This paper assesses the factors contributing to differences in the occupational attainment of workers with a marginal attachment to the labour market and workers who are part of mainstream Australia. Overall, 94 per cent of the occupational status differential is attributable to the inferior endowments possessed by workers with a marginal attachment to the labour market. Until the disadvantaged workers improve their skills they will not be able to gain access to high status occupations.     

Analysis of the 1980 Sydney Survey of Work Patterns of Married Women: Further Results*

Using cross-section data from the 1980 Sydney survey of the work patterns of married women, this paper contributes to the very scarce Australian stock of disaggregate econometric studies of the labour market activities of married women. Labour force participation, hours of work and wage functions (reservation wage as well as market wage) are estimated in a second-generation static labour supply framework. Unique features of the study include the availability of direct data on previous market experience, a formulation of the impact of children on the participation decision which permits testing for the presence of economies of scale in child-minding activities, estimation of the reservation wage function, and a data base which permits a clear distinction between earnings and other forms of income.     

The gender gap in early-career wage growth

In the UK the gender pay gap on entry to the labour market is approximately zero but ten years after labour market entry, there is a gender wage gap of almost 25 log points. This article explores the reason for this gender gap in early-career wage growth, considering three main hypotheses – human capital, job-shopping and 'psychological' theories. Human capital factors can explain about 11 log points, job-shopping about 1.5 log points and the psychological theories up to 4.5 log points depending on the specification. But a substantial unexplained gap remains: women who have continuous full-time employment, have had no children and express no desire to have them earn about 8 log points less than equivalent men after 10 years in the labour market.     

Occupational Attainment and Immigrant Economic Progress in Australia*

Using data from the 2001 Australian Census of Population and Housing, on adult men in full‐time employment, this paper augments a conventional human capital earnings function with information on occupations. It also estimates models of occupational attainment. The results from both the earnings function and model of occupational attainment indicate that the limited international transferability of human capital skills results in immigrants entering into relatively low status occupations when they first enter the Australian labour market. Comparison with similar research for the USA suggests that the different immigrant selection regimes (primarily family reunion in the USA, skill‐based immigration in Australia) do not impact on the negative association between current occupational status and pre‐immigration labour market experience.     

High school experiences,the gender wage gap,and the selection of occupation

Using within-high-school variation and controlling for a measure of cognitive ability, this article finds that high-school leadership experiences explain a significant portion of the residual gender wage gap and selection into management occupations. Our results imply that high-school leadership could build non-cognitive, productive skills that are rewarded years later in the labour market and that explain a portion of the systematic difference in pay between men and women. Alternatively, high-school leadership could be a proxy variable for personality characteristics that differ between men and women and that drive higher pay and becoming a manager. Because high-school leadership experiences are exogenous to direct labour market experiences, our results leave less room for direct labour market discrimination as a driver of the gender wage gap and occupation selection.     

The Impact of Incomes Policy on Aggregate Wage Determination in Australia*

A model of aggregate wage determination for Australia is developed and used to examine the effects of incomes policies on the level of real wages. A theoretical model of wage determination which includes several channels of incomes policy effects is specified and estimated using aggregate data. The results provide strong evidence to support the view that during periods of certain incomes policies there have been important changes in behaviour in the Australian labour market. In particular, during the period of the Prices and Incomes Accord it is estimated that equilibrium real wages were over 5 per cent below what would have been expected from previous experience.     

Gender wage gap across the wage distribution in different segments of the Indian labour market, 1983–2012: exploring the glass ceiling or sticky floor phenomenon

Women’s participation in the Indian labour market is not only low but they are also engaged in low-productivity and low-paying jobs. Further, the labour market is segmented by gender, type of employment, sector and location of residence. This study makes an important contribution by examining gender wage gap in India across different segments of the labour market over the wage distribution using national-level representative data spanning the period 1983 to 2012. The empirical results suggest that (i) the male–female raw wage gap has declined over time across the wage distribution, (ii) the gender wage gap attributable to differing returns to characteristics has increased over time and there is evidence of convergence of productive characteristics of men and women, (iii) sticky floor rather than glass ceiling phenomenon is observed in all segments of the labour market and (iv) the adjusted wage gap suggests that women at the bottom of the distribution face higher discrimination than those at the top and this has increased over the years.     

Gender segregation and earnings differences in the Spanish labour market

This article analyses the effects of different types of gender segregation on the gender wage differential for the Spanish labour market. Matched employer–employee data from a sample of 226,535 workers are used. These workers are employed in 61 occupations within 26,492 establishments in 51 different industries. Workers belonging to the same industry, establishment or job share common factors which cannot be observed and these factors affect wages. If these unobservable variables are correlated with the explanatory variables, their estimated effects will be biased. For this reason, we estimate the effects of each type of gender segregation on the wage gap using a robust specification to these possible correlations. We obtain that industrial segregation by gender explains a lower part of the wage gap between men and women than previous researches found using standard regressions, while the contributions of establishment segregation and occupational segregation within each establishment are greater.     

Screening and Human Capital in the Australian Labour Market of the 1990s

This paper presents tests of the screening hypothesis using data on adult males from the 1996 Australian Census of Population and Housing. These tests are based on comparisons of wage and salary earners and the self-employed, and public and private sector workers, as examples of screened and unscreened employments. The first test compares the mean levels of schooling, income and labour market experience in screened and unscreened sectors, while the second examines the returns to schooling and the goodness of fit of the earnings models for both wage and salary earning (separated into public and private sector employees) and self-employed groups. The results are equivocal, but suggest screening could be part of the earnings determination process in the Australian labour market.     

Gender Wage Gap: Some Recent Evidences from India

Gender wage inequality is a chronic socioeconomic malice in developed as well as in developing countries. This paper describes the outcomes of our study on the estimation of gender wage gap in the Indian labour market, using the 68th Round NSSO employment–unemployment data. The study uses Blinder–Oaxaca decomposition technique and Heckman two-step methodology, for removal of selectivity bias in the sample data, to measure the components of total gender wage gap, viz. (1) occupational segregation (explained by economic rationale) and (2) direct discrimination (not explained by economic rationale). The analysis indicates that the maximum direct discrimination is for job-related factors, such as industry type which are controlled by employers. The majority of the Indian employers today are men, which may be the reason for the insensitivity to the chronic direct discrimination against women in workplaces. The study also indicates that most of the explained gender wage gap is due to lower skill and experience amongst women. The findings suggest that besides labour law reforms for ensuring gender neutrality in workplaces, focused government policies for promoting women entrepreneurship and skill development of women are urgently required for reducing the gender wage gap in India.

     

Moonlighting: multiple motives and gender differences

This paper examines the incidence and reasons for moonlighting with a focus on gender differences. The study specifies and estimates a bivariate probit model of labour supply and the decision to hold more than one job. It is found that the factors leading men and women to moonlight are similar. A wage decomposition analysis reveals that 93 percent of the differential between male and female moonlighters' wages is not explained by differences in characteristics, and little connection is found between an individual's human capital and their moonlighting wage. Finally, it is found that moonlighters are less likely to report their income.     

Physical appearance and earnings: further evidence

The literature contains numerous studies on earnings differentials based on age, race, and gender. Comparatively few studies have examined differences in labour market success related to physical appearance. Using three waves of data collected at two organizations, this paper tested for earnings differentials among workers based on their self-reported appearance. Significant earnings premiums for attractiveness were found for women, but not for men.     

Labour quality and aggregate real-wage dynamics

The real wage plays an important role in many aggregate econometrics studies of the labour market. However, average wages, like any other average quantity, can change for two reasons – either through an underlying movement in the earnings potential of a unit of labour of given quality or, alternatively, through compositional changes which alter the relative proportions of different types of labour within the employed labour force. Using data from the General Household Survey to estimate earnings functions, the paper seeks to examine the contribution of these two factors for Britain from 1979 to 1989. It is shown that in periods of rising unemployment compositional changes can have a bigger effect on real-earnings growth than any underlying change in reward to labour of give quality. This raises the question of what economists actually are measuring when considering the behaviour of the aggregate real wage.