This paper simultaneously examines the effects of age, period and birth cohort on the evolution of the Australian gender wage gap from 2001-18. It employs the proxy variable approach within the Mincerian earnings function to overcome the Age-Period-Cohort (APC) identification problem while also controlling for employment selection and individual human capital accumulation. The paper corroborates previous evidence of a widening gender wage gap with age. It also provides new evidence of period effects suppressing female wage rates compared to male rates. However, as opposed to expectations, the study finds no significant influence of birth cohort effects on the Australian gender wage gap. The results also suggest that the failure to control for period effects can lead to significant cohort effects or substantial overestimation of age or cohort effects on wages. The findings of the paper have implications for a range of studies that employ Mincer-type earnings functions in addition to policy implications.
History
Publisher
University of Tasmania
Publication status
Published
Place of publication
Hobart
Rights statement
Copyright 2021 University of Tasmania Discussion Paper Series N 2021-02 JEL Classification: C33, J16, J31