An Analysis of the Origins of Sex Differences in Australian Wages

Abstract

made useful suggestions on an earlier draft. The normal caveat applies. Different levels of measured skills, geographic location and demographicfactors (such as marital status and country of birth) explain almost none of the hourly wage differences of Australian women and men in full-time employment. The major contribution to wage differences is apparently in the different returns paid by employers to men and women for observable characteristics. Usually this is considered as evidence for the existence of direct wage discrimination by employers but—at least for the data of this study—some questions remain as to the extent of this influence. Measurement issues related to both schooling and general labour market experience tend to exaggerate the role of direct employer discrimination, but even extreme assumptions as to the extent of mismeasurement of these variables do not eliminate such discrimination (although it is reduced from 13 to 3.5 per cent). Some part of the overall difference is likely to be a consequertce of (unmeasured) occupation factors and, of much greater contplexity, the possible influence of role-stereotyping and its interaction with family arrangements. This paper investigates the determinants of the male-female wage differential. Until recently little has been known of the determinants of wage differences between women and men in Australia. Broadly based investigations have identified average wage differences by sex (Power 1973), and several analyses have used regression techniques to ascertain the influence of particular variables (Jones 1982;Chapman & Miller 1983;Chapman 1984; Haig 1982). This research, however, typically suffers from problems of specification and inadequate data. Consequently, strong conclusions concerning the nature and extent of so-called 'discrimination' are premature at this stage, as are calls for particular policy initiatives to remedy the situation. This paper reports an empirical examination of an extremely rich and so far unutilized data set that provides new information on the origins of wage differences. A commonly used reduced-form econometric framework is employed to determine the separate contribution of a host of variables to average wage differences between men and women. The novelty and usefulat DEAKIN UNIV LIBRARY on March 15, 2015 jir.sagepub.com Downloaded from

Male–female earnings: further evidence for Australia

“…In contrast to the study by Chapman and Mulvey (1987), the earnings of women were found in general not to vary with industrial affiliation: the same is also true for single men. There are a number of exceptions.…”

“…What is striking about the results presented here is that married women do markedly better in the labour market than single women, a result that contrasts strikingly with UK and US findings, though is consistent with the results reported by Chapman and Mulvey (1987). It is important to note, however, that in the case of the married women-single women comparison differences in coefficients do contribute to the observed wage differential but in the opposite direction to differences in characteristics.…”

“…In contrast, there have been few attempts to explain the relatively inferior labour market position of Australian women. One notable exception, however, is the study by Chapman and Mulvey (1987) who use individual data to compare the predicted earnings of men and women holding constant various factors that affect labour market quality. This enables the authors to estimate the extent of labour market discrimination faced by women in Australia.…”

State of Pay: Female Relative Earnings in Australia

“…The corollary of this is that around three quarters of the gap occurs as a result of pay discrimination (see Chapman and Mulvey, 1986;Kidd and Shannon, 1996;Preston, 1997). After deducting the explained portion from the total wage gap, researchers find an unexplained (discriminatory) wage gap of between 8 per cent (Reiman, 1998) and 14.5 per cent (Preston, 1997).…”

Increasing the Scope of Pay Equity Inquiry: Insights from Case Study Research

“…Clearly there already exists a growing body of research Downloaded by [La Trobe University] at 15:41 13 June 2016 that examines the quantum of the differential between aggregate male and female earnings (Haig, 1982;Jones, 1983;Chapman and Miller, 1983;Chapman and Mulvey, 1986;Miller and Rummery, 1989;Drago, 1989;Kidd and Viney, 1991;Rimmer, 1991;Rummery, 1992;Vella, 1993;Kidd, 1993;Miller, 1994;Langford, 1995;Preston, 1997). In pay equity proceedings, the research task is to identify the factors that contribute to undervaluation and/or discrimination at an industry and/or occupational level.…”