Income, work and education: Insights for closing the gap in urban Australia

Abstract

Many factors contribute to differences in an individual’s command over resources. One of the factors is differences in labour market engagement and the level of education attainment across different geographical areas. However, existing analysis of the Closing the Gap outcomes is limited by the lack of adequate wage data for Indigenous Australians. Using the newly introduced geography Significant Urban Areas (SUAs), which distinguish between major cities, regional centres and remote areas, this paper analyses average personal income while adjusting for labour force status and education levels. We impute average wage data by focusing on the personal income of people who are employed full-time and assuming that the average weekly personal income is a reasonable approximation of wages. The findings suggest that wage differences between Indigenous and non-Indigenous Australians in urban areas are minimal after education attainment levels are adjusted for, with a gradient in wages according to the level of qualification. There are gender differences in wages in favour of men, both across SUAs and by education level. This is partly a reflection of the structure of employment and segregation in the labour market, which can reach as high as 40 per cent in some the SUAs. Considering the importance of wage data in the theory of economic development, it is essential that direct information on wages is collected in future surveys with a substantial sample of Indigenous Australians.