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Wage Growth Distribution and Changes over Time: 2001-2018

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  • Kalb, Guyonne

    (Melbourne Institute of Applied Economic and Social Research)

  • Meekes, Jordy

    (Leiden University)

Abstract

This paper investigates how wage growth varies among Australian employees with different individual characteristics and job characteristics, and how the role of these characteristics has changed over the 2001-2018 period. The results show that after increasing between 2002 and 2007, wage growth had significantly slowed down post 2008, and particularly from 2013 onwards, returning to the levels of the early 2000s. Employees' age, education, employment contract, occupation and industry explain a large share of differences in wage growth between individuals, and these characteristics are more important than aggregate business cycle effects. Conversely, the employee's gender seems less important. Interestingly, the employee's occupation is more important post-2008 than pre-2008, with managers and professionals experiencing substantially higher wage growth than others since 2014, whereas education was more important pre-2008. Finally, we find that casual employees receive a wage growth premium during the economic upturn and a penalty during the economic downturn.

Suggested Citation

  • Kalb, Guyonne & Meekes, Jordy, 2020. "Wage Growth Distribution and Changes over Time: 2001-2018," IZA Discussion Papers 13327, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp13327
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    More about this item

    Keywords

    individual wage growth; aggregate wage growth; business cycle; wage differentials;
    All these keywords.

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J53 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Labor-Management Relations; Industrial Jurisprudence
    • L24 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Contracting Out; Joint Ventures

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