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Australian age, period, cohort effects in the gender wage gap - 2001 to 2018

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Abstract

This paper simultaneously examines the effects of age, period and birth cohort on the evolution of the Australian gender wage gap from 2001-18. It employs the proxy variable approach within the Mincerian earnings function to overcome the Age-Period-Cohort (APC) identification problem while also controlling for employment selection and individual human capital accumulation. The paper corroborates previous evidence of a widening gender wage gap with age. It also provides new evidence of period effects suppressing female wage rates compared to male rates. However, as opposed to expectations, the study finds no significant influence of birth cohort effects on the Australian gender wage gap. The results also suggest that the failure to control for period effects can lead to significant cohort effects or substantial overestimation of age or cohort effects on wages. The findings of the paper have implications for a range of studies that employ Mincer-type earnings functions in addition to policy implications.

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  • Kamal, Mustafa & Blacklow, Paul, 2021. "Australian age, period, cohort effects in the gender wage gap - 2001 to 2018," Working Papers 2021-02, University of Tasmania, Tasmanian School of Business and Economics.
    • Handle: RePEc:tas:wpaper:37327
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    More about this item

    Keywords

    gender; wage gap; age; period; cohort; Australia;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • 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

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