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

44 Pages Posted: 4 Dec 2017

See all articles by Barbara Broadway

Barbara Broadway

University of Melbourne - Melbourne Institute of Applied Economic and Social Research; ARC Centre of Excellence for Children and Families over the Life Course

R Wilkins

affiliation not provided to SSRN

Multiple version iconThere are 2 versions of this paper

Date Written: December 4, 2017

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 i 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.

Keywords: Gender wage gap, minimum wages

JEL Classification: J31, J16

Suggested Citation

Broadway, Barbara and Wilkins, Roger, Probing the Effects of the Australian System of Minimum Wages on the Gender Wage Gap (December 4, 2017). Melbourne Institute Working Paper No. 31/17. Available at SSRN: https://ssrn.com/abstract=3082004 or http://dx.doi.org/10.2139/ssrn.3082004

Barbara Broadway (Contact Author)

University of Melbourne - Melbourne Institute of Applied Economic and Social Research ( email )

111 Barry St, FBE Building Level 5
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Melbourne, Victoria 3010
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HOME PAGE: http://www.melbourneinstitute.com/

ARC Centre of Excellence for Children and Families over the Life Course ( email )

Roger Wilkins

affiliation not provided to SSRN

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