Back to Front Down Under? Part Time/Full Time Wage Differentials in Australia

Abstract

In 2003, part-time employment in Australia accounted for over 42% of the Australian female workforce, nearly 17% of the male workforce, and represented 28% of total employment. Of the OECD countries, only the Netherlands has a higher proportion of working women employed part-time and Australia tops the OECD league in terms of its proportion of working men who are part-time. In this paper we investigate part-time full-time hourly wage gaps using important new panel data from the new Household Income and Labour Dynamics in Australia Survey. We find that the usual negative part-time wage penalty found in other countries is not found in Australia once unobserved individual heterogeneity has been taken into account. Instead, part-time men and women typically earn an hourly pay premium. This result survives our numerous robustness checks and we advance some hypotheses as to why there is a positive part-time pay premium.