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Decomposing the Gender Pay Gap in the Australian Managerial Labour Market

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  • Ian Watson

    (Macquarie University)

Abstract

This article examines the gender pay gap among full-time managers in Australia over the period 2001 to 2008. Using decompositions I explore the issue of discrimination, as well as the roles played by labour force experience and parenting. The results show that female managers earned on average about 27 per cent less than their male counterparts and the decompositions suggest that somewhere between 65 and 90 per cent of this earnings gap cannot be explained by recourse to a large range of demographic and labour market variables. A major part of the earnings gap is simply due to women managers being female. In addition, the presence of dependent children worsens the earnings gap, while the financial returns to labour force experience diminish in the latter years among female managers rather than stabilising, as they do for male managers. Despite the characteristics of male and female managers being remarkably similar, their earnings are very different, suggesting that discrimination plays an important role in this outcome. The article uses eight waves of HILDA data to fit mixed-effects models which are then used for Blinder-Oaxaca decompositions. In addition, a recent simulated change approach, developed by Olsen and Walby in the UK, is also implemented using this Australian data.

Suggested Citation

  • Ian Watson, 2010. "Decomposing the Gender Pay Gap in the Australian Managerial Labour Market," Australian Journal of Labour Economics (AJLE), Bankwest Curtin Economics Centre (BCEC), Curtin Business School, vol. 13(1), pages 49-79.
  • Handle: RePEc:ozl:journl:v:13:y:2010:i:1:p:49-79
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    2. Kennedy, Tom & Rae, Maria & Sheridan, Alison & Valadkhani, Abbas, 2017. "Reducing gender wage inequality increases economic prosperity for all: Insights from Australia," Economic Analysis and Policy, Elsevier, vol. 55(C), pages 14-24.
    3. Marco Biagetti & Sergio Scicchitano, 2016. "Are women in supervisory positions more discriminated against? A multinomial approach," Working Papers 2, Department of the Treasury, Ministry of the Economy and of Finance.
    4. Yekaterina Chzhen & Karen Mumford & Catia Nicodemo, 2013. "The Gender Pay Gap in the Australian Private Sector: Is Selection Relevant Across the Earnings Distribution?," The Economic Record, The Economic Society of Australia, vol. 89(286), pages 367-381, September.
    5. S. C. Noah Uhrig & Nicole Watson, 2020. "The Impact of Measurement Error on Wage Decompositions: Evidence From the British Household Panel Survey and the Household, Income and Labour Dynamics in Australia Survey," Sociological Methods & Research, , vol. 49(1), pages 43-78, February.
    6. Kamal, Mustafa & Blacklow, Paul, 2021. "Australian age, period, cohort effects in the gender wage gap - 2001 to 2018," Working Papers 2021-02, University of Tasmania, Tasmanian School of Business and Economics.
    7. Karolina Goraus & Joanna Tyrowicz & Lucas Velde, 2017. "Which Gender Wage Gap Estimates to Trust? A Comparative Analysis," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 63(1), pages 118-146, March.
    8. Marion Hutchinson & Janet Mack & Peter Verhoeven & Tom Smith, 2017. "Women in leadership: an analysis of the gender pay gap in ASX-listed firms," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 57(3), pages 789-813, September.
    9. Robert Breunig & Sandrine Rospabe, 2013. "The male-female wage gap in France - differences across the wage distribution," Australian Journal of Labour Economics (AJLE), Bankwest Curtin Economics Centre (BCEC), Curtin Business School, vol. 16(1), pages 155-199.
    10. Rosa Duarte & Cristina Sarasa & Mònia Serrano, 2018. "Structural change and female participation in recent economic growth: A multisectoral analysis for the Spanish economy," UB Economics Working Papers 2018/371, Universitat de Barcelona, Facultat d'Economia i Empresa, UB School of Economics.
    11. Kamal, Mustafa & Blacklow, Paul, 2021. "Attitudes to gender and personality in the Australian gender wage gap," Working Papers 2021-07, University of Tasmania, Tasmanian School of Business and Economics.
    12. Marco Biagetti & Sergio Scicchitano, 2014. "Estimating the Gender Pay Gap in the Managerial and non Managerial Italian Labor Market," Economics Bulletin, AccessEcon, vol. 34(3), pages 1846-1856.
    13. Rachel Aleks & Tina Saksida & Sam Kolahgar, 2021. "Practice What You Preach: The Gender Pay Gap in Labor Union Compensation," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 60(4), pages 403-435, October.
    14. Somasree Poddar & Ishita Mukhopadhyay, 2019. "Gender Wage Gap: Some Recent Evidences from India," Journal of Quantitative Economics, Springer;The Indian Econometric Society (TIES), vol. 17(1), pages 121-151, March.

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    More about this item

    Keywords

    Wage Level and Structure; Wage Differentials; Labour Discrimination: General; Economics of Gender; Non-labour Discrimination;
    All these keywords.

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J70 - Labor and Demographic Economics - - Labor Discrimination - - - General
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination

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