The Western Australian wage structure and gender wage gap: A post-mining boom analysis

Abstract

Whilst there is a large literature on the determinant of wages in Australia, relatively few studies have examined the determinants of wages at a state level. In this article, we present a study of the determinants of earnings in Western Australia, a state that experienced rapid growth during the mining boom of 2003–2013. We show that the relatively stronger wage growth in Western Australia since 2001 is the product of both compositional and price effects. We also report on the Western Australia and rest of Australia gender wage gaps. Our decomposition analysis of the mean gender wage gap shows that industry effects (as a result of gender segmentation across industry) account for a much larger share of the Western Australia gender wage gap than they do elsewhere in Australia, with the mining, construction and transport sectors driving the industry effects. Using quantile analysis we show that, relative to the rest of Australia, the Western Australia gender wage gaps are larger at both the bottom and the top of the wage distribution. At the median the Western Australia gender wage gap, at 2014–2016, is on par with that prevailing elsewhere in Australia, with women in both groups earning 10% less than their male counterparts, all else held equal.