An Analysis of the Origins of Sex Differences in Australian Wages

Abstract

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.