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Reducing gender wage inequality increases economic prosperity for all: Insights from Australia

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  • Kennedy, Tom
  • Rae, Maria
  • Sheridan, Alison
  • Valadkhani, Abbas

Abstract

This paper extends the debate about redressing persistent gender inequality in Australia by examining the relationship between labour productivity and the wage gap in all states and territories (1986–2013). It is a critical case study as Australia’s widening gender wage gap is contrary to other developed nations. Using four different estimation methods, we find that reducing the gap by 10% can boost per capita output up to 3%. To check the robustness of our findings, we also control for the effects of both physical and human capital. Our results suggest there exists a strong business case for eliminating the gender wage gap. Given the tangible benefits to both equity and efficiency, such a goal should be of paramount importance for policy makers.

Suggested Citation

  • 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.
    • Handle: RePEc:eee:ecanpo:v:55:y:2017:i:c:p:14-24
    DOI: 10.1016/j.eap.2017.04.003
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    Cited by:

    1. Ha, Hu Van & Doan, Tinh & Holmes, Mark, 2022. "What Accounts for Gender Income Inequality? Empirical Evidence from Vietnamese Small and Medium Manufacturing Enterprises," Journal of Economic Development, The Economic Research Institute, Chung-Ang University, vol. 47(1), pages 65-84, March.
    2. Rosa Duarte & Cristina Sarasa & Mònica Serrano, 2019. "Structural change and female participation in recent economic growth: a multisectoral analysis for the Spanish economy," Economic Systems Research, Taylor & Francis Journals, vol. 31(4), pages 574-593, October.
    3. Zhang, Cheng & Zhu, Yuyao & Zhang, Limin, 2024. "Effect of digital inclusive finance on common prosperity and the underlying mechanisms," International Review of Financial Analysis, Elsevier, vol. 91(C).
    4. Nguyen, Canh Phuc, 2021. "Gender equality and economic complexity," Economic Systems, Elsevier, vol. 45(4).
    5. Marina Fados & Maria Bohdalova, 2017. "Gender Inequality in Unemployment by Age in Spain, Switzerland and the European Union," MIC 2017: Managing the Global Economy; Proceedings of the Joint International Conference, Monastier di Treviso, Italy, 24–27 May 2017,, University of Primorska Press.
    6. Sun Ae Kim & Youngshin Song & Myoungjin Kwon, 2022. "Do Adults Who Practice Aerobic Physical Activities Have Different Influencing Factors for Depression: A Secondary Data Analysis," IJERPH, MDPI, vol. 19(10), pages 1-12, May.
    7. Marzena Baker & Muhammad Ali & Erica French, 2019. "Effectiveness of gender equality initiatives in project-based organizations in Australia," Australian Journal of Management, Australian School of Business, vol. 44(3), pages 425-442, August.
    8. Nguyen, Canh Phuc, 2022. "Uncertainty and gender inequality: A global investigation," The Quarterly Review of Economics and Finance, Elsevier, vol. 86(C), pages 31-47.
    9. Marina Faďoš & Mária Bohdalová, 2019. "Unemployment gender inequality: evidence from the 27 European Union countries," Eurasian Economic Review, Springer;Eurasia Business and Economics Society, vol. 9(3), pages 349-371, September.
    10. Henriques, C.O. & Marcenaro-Gutierrez, O.D. & Lopez-Agudo, Luis Alejandro, 2020. "Getting a balance in the life satisfaction determinants of full-time and part-time European workers," Economic Analysis and Policy, Elsevier, vol. 67(C), pages 87-113.

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    More about this item

    Keywords

    Australia; Gender; Per capita output; Wage gap;
    All these keywords.

    JEL classification:

    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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