Economic advantage and disadvantage: women in Australia

Presentation to the National Council of Women of Australia

Dr Marcia Keegan

Research Fellow, National Centre for Social and Economic Modelling

Saturday 6th October, 2012

Women have come far in the last few decades• In the early 1970s

● The Arbitration Commission ruled that women should receive the same wage as men for doing the same job

● Limited range of professions open to women● Limited employment options for married women, fewer still for women

with children● 15% of women had superannuation compared with 36% of males● Discrimination on the grounds of sex, family status or marital status

was not illegal

And now…

• No provision for different pay on the basis of gender

• All industries are open to women, and women are making headway in penetrating traditionally male dominated industries

• Employment discrimination on the grounds of sex, marital status or family responsibilities is mostly illegal

• Paid parental leave, childcare and readily available part-time work make it easier to combine work and family responsibilities

• Superannuation is almost a universal benefit for employees

Education

• The tables have turned in education – women are now, on average, better educated than men

• Higher levels of education are associated with higher wages

• Compared to men, women are:● More likely to complete Year 12● More likely to complete post-school qualifications● More likely to attend university

Young women are embracing further education, especially university training

Labour force participation of women has been steadily increasing

Women show a larger drop in participation during the childrearing years than the OECD average

Women are taking on professional roles

• Partly as a result of this increase in education levels, women are taking on more challenging and prestigious roles in the workforce

• Between 1988 and 2007, the percentage of managers and administrators who were female increased by four percentage points from 24% to 28%

• The majority of people employed as professionals are female, increasing from 40% in 1988 to 53% in 2007

• But has that been translating to similar levels of labour force participation between the sexes and equal remuneration for women?

Some shortcomings in women’s access to the labour force• Women are much more likely to work part-time than men;

just over half of women work full-time compared to 83% of men

• Women’s unemployment rates are not much different to those of men, but they show much higher rates of underemployment and labour force underutilisation

• Has this increase in education, labour force participation and professional occupations for women resulted in equal pay?

Wages: the gender gap still exists

• Gender wage gap = the difference in average weekly ordinary time earnings of females and males

• Over the last sixteen years, the gender wage gap has changed little, varying from 15-18%; that is, average weekly ordinary time earnings of females are around 82-85% of those of males

• Part of this is due to characteristics; hours worked, work experience, industry, occupation, children, education, etc

• Many studies have tried to control for these other factors in estimating how much of the gender wage gap is due to gender and how much is due to other factors

Key determinants of the gender wage gap

• ‘being a woman’ (60%)

• Industry segregation (predominance of men working with men and women with women) (25%)

• Labour force history (time in paid work, tenure in current occupation and with current employer) (7%)

• Vocational qualification (the lower proportion of women with a vocational qualification) (5%)

• Firm size (higher proportion of women working in smaller firms (3%)

Is the gender wage gap shrinking through generations?• The gender wage gap is worse for older women

• Baby boomers: controlled gender wage gap =13%

• Gen X: controlled gender wage gap = 3.5%

• Gen Y: controlled gender wage gap = 0.6%

• Might younger generations have it better? Or as Gen Y have children, will they face the same difficulties as their mothers?

Reducing the gender wage gap benefits the economy• NATSEM considered the impact of reducing the gender wage

gap on economic growth● A one percent reduction in the gender wage gap will lead to a direct

effect of a one quarter of one percent increase in economic growth; and

● Indirect effects (fertility, labour hours, participation) that cumulate to a one quarter of one percent increase in economic growth

• Taken together, this simulation implies that a reduction in the gender wage gap of one percentage point to could increase GDP by around $4.4 billion each year

Long-term impacts of the gender wage gap

• The impact of the gender wage gap is a substantial difference in the lifetime earnings of men and women

• Raising children exacerbates this gap:● Mothers with a bachelor degree can expect lifetime earnings of $1.8

million, compared to $3.3 million for similarly-qualified fathers● Even without having children, a woman with a bachelor’s degree can

expect lifetime earnings 20% less than a similar man ($2.3m vs $2.8m)

• However, among people with no children and Year 12 or less, there is almost no gap in lifetime earnings

• This gap in lifetime earnings results in women having much lower levels of wealth – and women live longer!

Median superannuation balances by age

Partnered men are much better off than single men

This does not mean women can rely financially on husbands 

Wife’s Superannuation (aged 45-54)

 

$25K or less >$25K & <$50K

>$50K & <$100K

>$100K & <$150K

$150K+

Superannuation Distribution of wives

55% 18% 13% 5% 8%Husband’s superannuation

         $25K or less 44.7% 17.7% 10.7% 18.3% 11.6%

>$25K & <$50K 13.1% 15.0% 9.8% 2.8% 9.0%

>$50K & <$100K 18.0% 27.0% 25.0% 19.4% 11.4%

>$100K & <$150K 7.9% 15.0% 14.9% 14.6% 5.6%

$150K+ 16.3% 25.3% 39.5% 44.9% 62.5%

Conclusion

• The economic impacts of gender inequality are still felt decades after women achieved more equal rights in the workforce and financial sphere

• Younger generations, who have benefited from comparative gender equality since birth, have closed the gender gap in education and appear to be closing it in wages

• Although women are not yet equal in terms of economic participation, it is heartening to see how much progress has been made in forty years