Full- and part-time work and wages : an application to two countries

Abstract

This thesis investigates the extent of the wage differentials between females working full- and part-time in Australia and the United States, the causes of these differentials and the effect these differentials have on the aggregate ratio of female to male wages in both countries. The thesis contributes to existing knowledge in three ways. Firstly, it documents the magnitude and sign of the male/female wage ratio and the full/part-time wage ratio for countries which include Australia and the United States. For both Australia and the United States, the average male wage per hour was estimated to exceed the average female wage per hour. For the United States, consistent with evidence from other international evidence, wages of full-time workers were estimated to exceed those of part-time workers. However, for Australia, part-time hourly wages were estimated to exceed full-time hourly wages by around 20 percent. Secondly, this thesis draws upon the theories of human capital, segmented labour markets and efficiency wage to develop a model which explains individual's wages. From this model, the roles of human capital endowments, sample selection, occupations and institutions in determining the wage differential between full- and part-time workers was estimated. For Australia, differences in the endowments were not found to be an important factor in determining the causes of the wage differential between full- and part-time workers. For the United States, however, differences in the level of endowments were estimated to be important in explaining the wage differential between females working full- and part-time. Sample selection effects were estimated to be important in explaining the wage differential between females working full- and part-time in both countries. This effect was interpreted as indicating that in Australia, higher hourly wages are inducing ’better' quality workers into the part-time labour market. Unexplained differences (such as discrimination and productivity differences) were also found to be important in explaining the wage differential between females working full- and part-time in the United States, but not in Australia. This finding lead us to examine the role of occupations and institutions in explaining the full- and part-time wage differential. Thirdly, an estimate of the effect of part-time work and wages on the overall wage ratio between males and females was undertaken. For Australia, including part-time workers explicitly into the gender wage analysis decreased the gender wage differential estimate derived for full-time workers by 5 percentage points to 19 percent. For the United States, explicitly including part-time workers into an estimate of the gender wage differential increased the estimate from the full-time gender wage analysis by 4 percentage points to 40 percent.