Factors Influencing Earnings Differentials Between Male and Female Recent Graduates

Abstract

T his study adds to the knowledge of earnings differentials between men and women in Australia, by fitting earnings functions to a sample of workers who were first surveyed in 1983 in their first year of university and who then left university, either having dropped out or having obtained a formal tertiary qualification, and wbo supplied work histories in a 1993 follow-up survey. By analysing incomes in full-time jobs on leaving university and then in the full-time jobs four years later; the problem of differing lengths of work experience is avoided. Decompositions of the identified earnings differentials suggest that about half of the differential favouring men of 11.6 per cent in tbe jobs held after four years was explained by higher levels of formal qualification of men and their more favourable occupational distribution. The remain ing 6 per cent of the overall differential could not be explained by the regression analysis. Differences in the extent and quality of on-the-job training, and the resultant differen tial promotional probabilities between men and women, are suggested as one possible explanation for tbe substantial earnings advantage to men in the job held after four years.