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1350.0 - Australian Economic Indicators, 1996  
Previous ISSUE Released at 11:30 AM (CANBERRA TIME) 05/04/1996   
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Feature Article - Trends in the Female-Male Earnings Ratio

Introduction

In November 1994, female average weekly earnings were approximately two-thirds of male average weekly earnings (Graph 1). The ratio of female to male average weekly earnings rose substantially during the early to mid 1970s, following the introduction of equal pay legislation. However, since that period, there have been only small fluctuations in the female-male earnings ratio. A significant part of the gap between female and male average weekly earnings can be explained by differences in the working arrangements of female and male employees.

GRAPH 1: RATIO OF FEMALE TO MALE AVERAGE WEEKLY EARNINGS
All employees
Graph - Ratio of female to male average weekly earnings

Main Findings

In August 1994, the female-male earnings ratio was 67.0 per cent. Among the major influences on the gap between female and male average weekly earnings were:
  • The higher proportion of female employees working part time compared to male employees. Once an adjustment was made for this difference, the female-male earnings ratio in August 1994 rose substantially to 83.7 per cent.
  • The lower average number of hours worked by female employees compared to male employees. Once an adjustment was made for this difference, the female-male earnings ratio in August 1994 rose further to 91.3 per cent.
  • The concentration of female employees in lower paying occupations. Once an adjustment was made for differences in the occupational distribution of female and male employees, the ratio of the female-male earnings per hour worked in August 1994 rose slightly to 92.9 per cent.

Between August 1975 and August 1994, the female-male earnings ratio closed by 1.2 percentage points. Among the major influences on the lack of change in the gap between female and male average weekly earnings were:
  • The greater rise in the proportion of female employees working part time compared to male employees. After adjusting for changes in the proportion of female and male employees working part time, the rise in the female-male earnings ratio was much greater, rising 8.3 percentage points between August 1975 and August 1994.
  • The fall in the average number of hours worked by female employees compared to the rise in the average number of hours worked by male employees. After adjusting for changes in the average number of hours worked by female and male employees, the rise in the female-male earnings ratio was also much greater, rising 8.1 percentage points between August 1975 and August 1994.

Part-time Employees

In August 1994, there was a substantially higher proportion of female employees working part time (41.5 per cent) than male employees (10.7 per cent) (Table 1). This difference has a major influence on the lower average weekly earnings of female employees, and consequently on the ratio of female-male average weekly earnings (the actual average weekly earnings ratio).
TABLE 1. EMPLOYMENT STRUCTURE AND ACTUAL AVERAGE WEEKLY EARNINGS RATIO: EMPLOYEES, AUGUST 1994

Employment Structure
Actual Average Weekly Earnings
Females
Males
Females
Males
Ratio

- per cent -
- dollars -
- per cent -
Full-time employees
58.5
89.3
527.10
656.40
80.3
Part-time employees
41.5
10.7
238.60
202.80
117.7
All employees
100.0
100.0
407.30
608.00
67.0

Source: The Labour Force, Australia (cat. no. 6203.0) and Weekly Earnings of Employees, Australia (cat. no. 6310.0)


To assess the effect of differences in the proportion of female and male employees working part time, an adjusted average weekly earnings ratio can be calculated by weighting the full-time and part-time average weekly earnings for female and male employees according to the proportions of all employees in full-time and part-time employment. In August 1994, the adjusted average weekly earnings ratio was 83.7 ˙per cent (Table 2), which was 16.7 percentage points higher than the actual average weekly earnings ratio (67.0 per cent).


TABLE 2. ADJUSTED AVERAGE WEEKLY EARNINGS RATIO(a): EMPLOYEES, AUGUST 1994

Adjusted Average Weekly Earnings
Overall employment structure
Females
Males
Ratio

- per cent -
- dollars -
- per cent -
Full-time employees
75.6
527.10
656.40
80.3
Part-time employees
24.4
238.60
202.80
117.7
All employees
100.0
456.80
545.80
83.7

(a) Female and male average weekly earnings are adjusted to eliminate differences in the distribution of female and male employees between full-time and part-time employment.
Source: The Labour Force, Australia (cat. no. 6203.0) and Weekly Earnings of Employees, Australia (cat. no. 6310.0)


Trends in Part-time Employment

In recent decades, there has been a substantial rise in the proportion of both female and male employees working part time. Between August 1975 and August 1994, the proportion of female employees working part time increased 12.1 percentage points (from 29.4 ˙per cent to 41.5 per cent), while the proportion of male employees working part time increased only 7.1 percentage points (from 3.6 per cent to 10.7 per cent) (Graph 2).


GRAPH 2: PERCENTAGE OF EMPLOYEES WORKING PART TIME

Graph - Percentage of employess working part time showing females and males
This greater rise in the proportion of female employees working part time has exerted a downward effect on the female-male earnings ratio. Between August 1975 and August 1994, the adjusted average weekly earnings ratio rose 8.3 percentage points (from 75.4 per cent to 83.7 per cent), while the actual average weekly earnings ratio rose only 1.2 percentage points (from 65.8 per cent to 67.0 per cent) (Graph 3).


GRAPH 3: ACTUAL AND ADJUSTED AVERAGE WEEKLY EARNINGS RATIO: WAGE AND SALARY EARNERS


Graph - Actual and adjusted average weekly earnings ratios of wage and salary earners
Average Hours Worked

Further insight into the gap between female and male average weekly earnings can be gained by exploring differences in the average number of hours worked by female and male employees. In August 1994, female employees worked on average 29.6 hours per week, compared with an average of 40.3 hours for male employees. While this difference was due in part to the higher proportion of female employees working part time, it was also due to full-time male employees working more hours on average (43.1 hours) than full-time female employees (38.5 hours).

To assess the effect of differences in the average number of hours worked by female and male employees, an actual average hourly earnings ratio can be calculated. In August 1994, the actual average hourly earnings ratio was 91.3 per cent (Table 3), which was 24.3 percentage points higher than the actual average weekly earnings ratio (67.0 per cent).


TABLE 3. AVERAGE WEEKLY HOURS WORKED AND ACTUAL AVERAGE HOURLY EARNINGS RATIO: EMPLOYEES, AUGUST 1994

Average weekly hours worked
Actual average hourly earnings
Females
Males
Females
Males
Ratio

- hours -
- dollars -
- per cent -
Full-time employees
38.5
43.1
13.7
15.2
89.8
Part-time employees
16.7
15.4
14.3
13.1
108.5
All employees
29.6
40.3
13.8
15.1
91.3

Source: The Labour Force, Australia (cat. no. 6203.0) and Weekly Earnings of Employees, Australia (cat. no. 6310.0)


For full-time employees, the actual average hourly earnings ratio (89.8 per cent) was higher than the actual average weekly earnings ratio (80.3 per cent), while for part-time employees, the actual average hourly earnings ratio (108.5 per cent) was lower than the actual average weekly earnings ratio (117.7 per cent). This reflects the influence of the lower average number of hours worked by females in full-time employment, and the higher average number of hours worked by females in part-time employment.


Trends in Hours Worked

While the proportions of both female and male employees working part time have risen over recent decades, the average number of hours worked per week has also risen for both full-time and part-time female and male employees (Table 4). This rise was greatest for male employees working full-time. The fall in the average number of hours worked by all female employees reflects the large rise in the proportion of female employees working part time.


TABLE 4. PERCENTAGE CHANGE IN AVERAGE WEEKLY HOURS WORKED: EMPLOYEES, AUGUST 1975 AND AUGUST 1994

Average Weekly Hours Worked
August 1975
August 1994
Percentage change
Females
Males
Females
Males
Females
Males

- hours -
- hours -
- per cent -
Full-time employees
36.4
39.3
38.5
43.1
5.8
9.6
Part-time employees
16
14.6
16.7
15.4
4.6
5.8
All employees
30.4
38.5
29.6
40.3
-2.8
4.7

Source: The Labour Force, Australia (cat. no. 6203.0)


The fall in the average number of hours worked by female employees compared to the rise in the number of hours worked by male employees has exerted a downward effect on the female-male earnings ratio. Between August 1975 and August 1994, the actual average hourly earnings ratio rose 8.1 percentage points (from 83.2 per cent to 91.3 per cent), while the actual average weekly earnings ratio rose only 1.2 percentage points (Graph 4)


GRAPH 4: ACTUAL AVERAGE WEEKLY EARNINGS RATIOS: EMPLOYEES

Graph - Actual average weekly earnings ratio and actual hourly earnings ratio

Occupational Segregation

A major difference in the composition of the female and male workforces is the tendency for female employees to be concentrated in a small number of "traditional female" occupations, while male employees tend to be more evenly spread across occupations. However, the "traditional female" occupations are not necessarily the lowest paying female occupations. In fact, some of the "traditional male" occupations have the lowest female average weekly earnings. In August 1994, more than half of all female employees were concentrated in eight (of fifty-two) minor occupation groups; Sales Assistants (11.1 per cent), Numerical clerks (9.7 per cent), Stenographers and typists (7.4 per cent), School teachers (6.0 per cent), Receptionists, telephonists and messengers (5.8 per cent), Registered nurses (4.7 per cent), Tellers, cashiers and ticket salespersons (4.7 per cent), and Personal service workers (4.7 per cent).

The difference in the occupational distribution of female and male employees is called occupational segregation. The actual average weekly earnings ratio is influenced by both the amount of occupational segregation and the variation in average weekly earnings across occupations. In August 1994, a negative relationship existed between the average weekly earnings of all employees in the minor occupation groups and the proportion of employees within these groups who were females (i.e. female employees tended to be over-represented in lower paying minor occupation groups) (Graph 5).
GRAPH 5: RELATIONSHIP BETWEEN AVERAGE WEEKLY EARNINGS AND PERCENTAGE FEMALE(a) WITHIN MINOR OCCUPATION GROUPS, AUGUST 1994
Graph - Relationship between average weekly earnings and percentage of females within mionor occupation groups.


To assess the effect of differences in the occupational distribution of female and male employees, an occupation-adjusted average weekly earnings ratio can be calculated by giving female and male average weekly earnings equal weights within each minor occupation group. The weight for each minor occupation group is equal to the number of employees in that group expressed as a percentage of the total number of employees. In August 1994, the occupation-adjusted average weekly earnings ratio was 74.0 per cent (Table 5), which was 7.0 percentage points higher than the actual average weekly earnings ratio (67.0 per cent).
TABLE 5. ACTUAL AND OCCUPATION-ADJUSTED AVERAGE WEEKLY EARNINGS RATIOS(a): MAJOR OCCUPATION GROUPS, EMPLOYEES, AUGUST 1994

Actual average weekly earnings
Occupation-adjusted average weekly earnings
Major occupation groups
Females
Males
Ratio
Females
Males
Ratio

- dollars -
- per cent -
- dollars -
- per cent -
Managers and administrators
626.90
850.50
73.9
639.40
843.40
75.8
Professionals
599.90
827.80
72.5
620.20
811.70
76.4
Para-professionals
522.70
693.40
75.4
536.20
676.80
79.2
Tradespersons
349.70
547.60
63.9
415.00
541.40
76.7
Clerks
425.90
591.30
72.0
426.00
579.90
73.5
Salespersons and personal service workers
287.80
484.10
59.5
307.90
438.26
70.3
Plant and machine operators, and drivers
367.40
591.00
62.2
380.30
585.00
65.0
Labourers and related workers
278.70
419.10
66.5
296.10
409.20
72.3
All Occupations
407.30
608.00
67.0
432.00
583.90
74.0

(a) Female and male average weekly earnings are adjusted to eliminate differences in the distribution of female and male employees across minor occupation groups.
Source: The Labour Force, Australia (cat. no. 6203.0)


While the occupation-adjusted average weekly earnings ratio was greater than the actual average weekly earnings ratio for all major occupation groups, the magnitude of the difference was greatest for Tradespersons (12.8 percentage points) and Salespersons and personal service workers (10.8 percentage points). These figures reflect the higher concentrations of female employees in lower paying minor occupation groups within these two major occupation groups.


However, the lower average weekly earnings in some of these minor occupation groups are due to the lower average number of hours worked by employees within these groups. The combined influence of differences in the occupational distribution of female and male employees and differences in the average number of hours worked by female and male employees can be assessed by calculating an occupation-adjusted average hourly earnings ratio, derived by giving female and male average hourly earnings equal weights within each minor occupation group. The weight for each minor occupation group is equal to the aggregate number of hours worked by employees in that group expressed as a percentage of total number of hours worked by all employees. In August 1994, the occupation-adjusted average hourly earnings ratio was 92.9 per cent (Table 6), which was only 1.6 percentage points higher than the actual average hourly earnings ratio (91.3 per cent).


TABLE 6. ACTUAL AND OCCUPATION-ADJUSTED AVERAGE HOURLY EARNINGS RATIOS(a): MAJOR OCCUPATION GROUPS, EMPLOYEES, AUGUST 1994

Actual average hourly earnings
Occupation-adjusted average hourly earnings
Major occupation groups
Females
Males
Ratio
Females
Males
Ratio

- dollars -
- per cent -
- dollars -
- per cent -
Managers and administrators
15.30
17.00
89.8
15.30
16.90
90.3
Professionals
17.40
19.10
90.8
17.80
18.90
94.1
Para-professionals
17.40
17.80
98.0
17.60
18.00
97.6
Tradespersons
10.80
13.50
79.9
13.70
13.40
102.1
Clerks
13.60
15.80
86.1
13.50
15.60
86.8
Salespersons and personal service workers
11.70
13.20
89.0
12.10
12.80
95.0
Plant and machine operators, and drivers
11.20
14.10
79.8
12.10
14.00
86.4
Labourers and related workers
11.40
12.30
92.6
11.20
12.30
91.3
All Occupations
13.80
15.10
91.3
14.00
15.10
92.9

(a) Female and male average hourly earnings are adjusted to eliminate differences in the distribution of the number of hours worked by female and male employees across minor occupation groups.
Source: The Labour Force, Australia (cat. no. 6203.0) and Weekly Earnings of Employees (cat. no. 6310.0)


Conclusion

The results of the analysis indicate that a significant part of the gap between female and male average weekly earnings can be explained by the higher proportion of female employees working part time and the lower average number of hours worked by female full-time employees (Graph 6). While female employees also tend to be concentrated in lower paying occupations than male employees, only a small part of the gap between female and male average hourly earnings can be explained by differences in the occupational distribution of female and male employees. This supports previous findings suggesting that most of the gap between female and male average hourly earnings is attributable to female employees occupying lower level positions than male employees within individual occupation groups, rather than differences in the distribution of female and male employees between these groups (Rimmer, 1991).


GRAPH 6: SUMMARY OF FEMALE-MALE AVERAGE WEEKLY AND AVERAGE HOURLY EARNINGS RATIOS: AUGUST 1994
Graph - Summary of female-male average weekly and average hourly earnigs ratios for August 1994



Furthermore, the lack of change in the gap between female and male average weekly earnings over the last two decades can be explained by the fall in average hours worked by female employees (mainly due to the increasing proportion of female employees working part time) compared to the rise in average hours worked by male employees (despite the increasing proportion of male employees working part time).


For further information about this article please contact The Director, Labour Market Statistics, (02) 6252 7795.

This feature article was contributed by John Preston, Labour Statistics Analysis Unit, ABS.


References

Australian Bureau of Statistics, The Labour Force, Australia, various issues (cat. no. 6203.0)

Australian Bureau of Statistics, Average Weekly Earnings, States and Australia, various issues (cat. no. 6302.0)

Australian Bureau of Statistics, Weekly Earnings of Employees (Distribution), Australia, various issues (cat. no. 6310.0)

Rimmer, S. M. (1991), "Occupational Segregation, Earnings Differentials and Status among Australian Workers", Economic Record, 67, 205-216

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