Gender Differences in Wage Returns to Computer Skills in Australia

Abstract

ABSTRACT This article examines how different types of computer skills influence the wages of men and women in Australia. The estimated wage effect for each type of computer use ranged from 2.8% to 7.0%. Comparing these results with earning equations which do not explicitly account for computer usage and skills reveals an associated bias on the returns to education. Wage equations which do not explicitly account for computer skills upwardly bias the returns to education by up to 68%. This bias is inversely proportional to the level of education. That is, the returns to education for individuals with lower educational qualifications are more highly biased by not accounting for computer skills than those with higher qualifications. Lower levels of computer skills reward females more highly than males. Higher levels of computer skills reward males at a greater rate than females. The major findings arising from this research relates to the observable wage differential between males and females. After accounting for other measurable factors such as education, tenure, and language skills females are rewarded more highly for their computer skills than males. Indeed, if the return on computer skills were the same for females as males, the gender wage differential could be expected to increase by 13.4%. This finding suggests that computer literacy can be a more important factor in increasing the wages of females than completing high school.