Earnings Outcomes in Metropolitan and Regional Labour Markets– A Gender-Based Analysis for New South Wales and Victoria

Abstract

It is generally accepted that the key characteristics of labour markets in Australian capital cities differ from those of the labour markets in the rest of Australia although labour market policy is typically conducted at the national level without taking regional differences into account. Gender issues have frequently been highlighted in the many analyses of urban Australian labour markets. Other studies have focused on the urban-regional dichotomy of the labour market. However, although studies of labour market features and outcomes in Australia have focused on issues related to location or gender, they rarely address both. This paper seeks to establish if discrimination by gender differs between regional and urban communities in the Australian context. The conceptual framework used in this research is in the tradition of human capital analysis. We first analyse, separately, determinants of hourly wage rates and weekly incomes by gender in Australian metropolitan cities and regional areas. We then utilise the Blinder-Oaxaca procedure, to decompose the mean outcome differences between men and women within a region into that part that is 'explained' by gender differences in endowments and that part which remains unexplained by such differences and which therefore provides a measure of discrimination. The data is drawn from individual level confidentialised unit record files (CURF) data of the 2006 Australian Census. Gender-based analysis is conducted for each region, Sydney, regional NSW, Melbourne and regional Victoria, with a view to discerning if the impact of the determinants vary spacially. The research confirmed that gender plays an important role in influencing labour market outcomes. The research also identified a number of factors that impact on both hourly wages and weekly earnings and assessed how these factors impacted differently for men and women across metropolitan and regional areas. The results indicate that, in general, differences exist between men and women in hourly wage rate and weekly income earned. The determinants of these differences varied between metropolitan cities and regional areas. With respect to issues of gender discrimination in employment, the use of the Blinder-Oaxaca decomposition technique confirmed the presence of discrimination against women in all regions. Wage discrimination is more pronounced in metropolitan areas whilst discrimination in weekly earnings is more important in non-metropolitan areas. The latter discrimination is likely to reflect both fewer job opportunities for women and a lower ownership of income earning assets by women.