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Probing the Effects of the Australian System of Minimum Wages on the Gender Wage Gap

Author

Listed:
  • Broadway, Barbara

    (Melbourne Institute of Applied Economic and Social Research)

  • Wilkins, Roger

    (Melbourne Institute of Applied Economic and Social Research)

Abstract

When wage setting is more regulated, the gender wage gap tends to decrease. We examine whether this holds for a complex system of occupation- and industry-specific minimum wages, which cover both low-pay and high-pay segments of the labour market. The system has the potential to close the gender wage gap by ensuring equal minimum pay for equal jobs, but it also has the potential to widen it by discriminating against jobs more commonly held by women. We carefully describe wage levels as well as returns to experience and their association with individual gender as well as the male employment share in the individual's field (industry or occupation) of work. We find that the gender wage gap among employees receiving a minimum wage is less than half the magnitude of the gap among other employees. Despite this, there is nonetheless evidence that, within the minimum-wage system, there is a wage penalty for employment in jobs more commonly held by women, although only for employees without university degrees. Our results suggest that, for university-educated women, the regulated setting of minimum wages helps to close the gender wage gap and counteracts the undervaluation of work typically undertaken by women. However, for less-educated women, who comprise approximately 82% of female minimum-wage employees, minimum wages could do more to close the gender wage gap if they were neutral with respect to the gender composition of jobs.

Suggested Citation

  • Broadway, Barbara & Wilkins, Roger, 2017. "Probing the Effects of the Australian System of Minimum Wages on the Gender Wage Gap," IZA Discussion Papers 11191, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp11191
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    References listed on IDEAS

    as
    1. James Albrecht & Anders Bjorklund & Susan Vroman, 2003. "Is There a Glass Ceiling in Sweden?," Journal of Labor Economics, University of Chicago Press, vol. 21(1), pages 145-177, January.
    2. Siobhan Austen, 2003. "Gender Differences in the Likelihood of Low Pay in Australia," Australian Journal of Labour Economics (AJLE), Bankwest Curtin Economics Centre (BCEC), Curtin Business School, vol. 6(1), pages 153-176, March.
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    More about this item

    Keywords

    gender wage gap; minimum wages;

    JEL classification:

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

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