HI6008 Business Research-Survey on Government Wages Gap

stralian literature with the focus on issues relating gender wage inequality and their corresponding impacts on individuals, households and the nation at large.

With regard to the proposals on the impact of the gender wage gap on business performance in Australian financial industries, businesses will find it significant. The outcomes of this study will be used by businesses and government departments when drawing policies and programs on wage earnings. The study will also aid in mass education of the public on the issue of gender equality not only at the social level but also at economic level. Additionally, this study will help the government to come up with appropriate policies to address the gender wage gap so as to minimize its economic impacts.

Gender differences in earnings have for long been the primary focus of the various labor literatures (Kuhn and Shen, 2012). The previous empirical results have shown a continuous average gender wage gap in Australia (Blau, 2016). The range of wage gap lies between 10 to 25 percent depending on the type of control variables and the kind of workers included. The extant Literature on the impacts of inequality in gender on the macroeconomic results has majorly focused on gender inequality in education Barro (2013), and rarely on the gender wage gap. Nevertheless, there also exists research on the significant effects of gender wage gap on the economic growth (Seguino, 2011).The arguments of such works address more than the issue of gender inequality and in its place considers the impacts of gender wage gap on the economic performance.

Seguino (2011) made a hypothesis on semi-industrialized nations that are export-oriented; female employees with low wages in export industries can improve investment, exports, and the overall economic growth. Her outcomes indicated that the inequality in gender wage might be crucial in the growth of the economy. Schober and Winter-Ebmer (2011) also examined the findings of Seguino and concluded that female discrimination regarding wages was instrumental in enhancing growth at initial stages of business development. The outcomes of these researchers are in contrast with existing literature that strongly shows that gender inequality in wages, education, and job access inhibit financial performance of businesses.

DiPrete and Buchmann (2013) suggest that gender discrimination in education halters business growth. The authors propose that gender discrimination reduces the average human capital and therefore negatively affecting the economic growth which in turn harms the business performance. A study by Barro (2013) on female education in growth regressions show negative coefficients, the succeeding study revealed that this outcome was as a result of the insertion of some outliers Bandiera and Natraj (2013), in addition to multi-colinearity between the female and male attainments of the school (Kabeer and Natali, 2013). Furthermore, education of the female has positive impacts like shortened fertility, reduced child death rate, or advanced education for the offspring. All these aspects enhance the long-term growth of various perspectives of a nation including business performance (Sauré and Zoabi, 2011). Studies on employment access by females also have indicated a gender bias in favor of men. The effects of the increase in employment gaps in the Middle East and North Africa were studied by Cuberes and Teignier (2014). The outcomes show that the variations in growth in East Asia countries are as a result of the high costs of the low female labor force.

A study of India by Jensen (2012) shows that the gender discrimination regarding managerial positions and employment hinder maximum talent allocation and reduces business growth and overall country development. Wage gender discriminations also cause market distortions (Wang and Gunderson, 2012). Elucidates that wage gap can cause efficiency losses regarding the ability of the workforce of an economy.

For instance, if women feel discriminated against and their wage reservation is not sufficiently met, and then they can hesitate to participate in the labor market. Additionally, wage gaps negatively affect human capital investment (Razavi, 2012). Kabeer and Natali (2013) assert that issues of gender wage gap impact household decisions because the more the mother is in charge of the resources of the child’s well-being the more such funds are likely to increase. Gender wage gaps which worsen the income of women or discourage them from participating in the labor market might hamper and derail business growth.

For example, Richards et al. (2013) examines Brazil using household survey data with non-labor and labor income information. The findings show that the rise in women’s income directly increased the household budget meant for schooling, health, and general household services which further improved the health of the children. Sauré and Zoabi (2011) also found out that wage gender gap affects the fertility of women because household decisions on fertility is affected by relative wages of women. As wages increase, the opportunity costs of children increase proportionately resulting in reduced population growth and high levels of capital per worker and consequently higher growth (Pervaiz et al., 2011).

On the other hand, Seguino (2011) alleges that in the context of international competitiveness, the gender wage gap is profitable because it may stimulate growth in economies that are export-oriented and semi-industrialized. In manufacturing industries that are dominated by females, lower relative wages will attract investors due to the anticipated profitability; a scenario that will enhance exports and business performance. Seguino uses a macroeconomic model as a basis for her analysis (Seguino, 2012). In this model, the female wages are low which diminish the constraint of the balance of payment that the developing nations face; a situation that demands the imports of technology to climb up the industrial ladder.

Similar conclusions are also derived at by Hossain, Mathbor, and Semenza, (2013), who demonstrates that countries whose industrialization is export-oriented have increased female labor force participation as a result of advocating for reduced wages to improve international competitiveness. Similar data was used by Schober and Winter-Ebmer (2011) in the analysis of the impact of gender wage difference and the outcomes showed that high gender wage gap led to increased exports and economic growth in the sampled semi-industrialized nations. The findings of Juhn, Ujhelyi, and Villegas-Sanchez (2014) partially favor these arguments, which point out that the countries experiencing high levels of gender wage gaps have increased exports of goods that are labor intensive.  Nonetheless, the researchers are plainly hesitant on whether this model can promote growth and highlight that the export structure is affected more than the total exports.

Miller (1994) conducted a study with the use of data in the 1980s and found out that the gender pay gap was at 13 percent, with a significant part of that gap (6% points) being attributed to work-related concentration. Miller recommended an elimination of 40% of the variation by the execution of a correct comparable worth. Wooden (1999) used a later data set but with high similarity to investigate the problem of comparable value. The outcomes of Wooden showed a pay gap of 11.5 percent which was smaller than that of Miller but with significantly related to that of Miller. According to Wooden, 4.2% points were attributed to occupational concentration, which corresponds to a third of the gap. Conversely, Wooden disputes the inclusion of the managerial personnel in such surveys claiming it to be unjustified. Wooden found out that when he eliminated the management staff from the analysis, the gender pay gap reduced to 8.9%, and the occupational concentration being at 3.6% points.

He observed that the gender pay gap in the Australian companies was likely to widen as a result of the under-representation of women in the top management positions because the earnings of the senior employees were significantly higher than the all- industrial average. Consequently, he concluded that such a move eliminated the scope for industrial courts to do away with a substantial part of the gender pay gap since the managers’ remunerations usually do not fall in the jurisdiction of technical awards. Furthermore, Wooden suggests that the issue is not inequality in earnings but rather inequality in access to promotions.

Whereas the focus of most of the studies on gender pay gap has been on the general workforce, or full-time employees, the latest surveys have shifted their focus to the pay gap through the whole wage distribution. Miller used the unit record from the Australian census of 2001 and discovered that there was a high pay gap in the class of wage earners than that of the low wage earners. According his findings, the pay gap was below 10% at the 5th-35th quartile, 12% at the 40th quartile, and 23% at the 95th percentile. By these findings, Miller reasons that as much as the policy discussion on the gender wage gap should pay attention to the entire elements of the wage distribution, there is a specific demand for the focus on the class of high-wage earners. Additionally, other studies propose that the outcomes of policy initiatives may vary because they are subject to locations (Fitzenberger, Koenker, and Machado, 2013). The author's reason that the impacts of policies might change at different quartiles of the wage distribution. For instance, more women venture into occupations that are lowly paid due to the implementation of the systems. Thus, they conclude that the gender wage inequality should be measured at different quartile levels to ascertain the indirect impact of such policies.

The existing Australian Studies have focused on the entire workforce Charlesworth and Macdonald (2014) or have limited their study to the staff that earns wages and salaries (Smith et al., 2013). Other studies have focused on the impacts of gender inequality on education and the labor market (Wang and Gunderson, 2012). However, there is an absence of the study on the effect of gender wage gap on the business performance in the sector financial industries. The current study seeks to fill in this void in the Australian literature where the impact of the gender wage gap on business performance in Australian financial industries is examined.

Conclusion

This qualitative analysis examined the existing Australian literature on the gender wage gap across various sectors and its corresponding impact on the individual and the economy at large. There are current studies on this research phenomenon which have focused on multiple areas such as the manufacturing sector. But no study exists on the impact of gender wage gap on financial industries. Furthermore, the existing studies have focused on the effect of gender wage gap on the access to education, job promotion, and household budget. Therefore, this study aims at filling the research gap of the Australian literature on the impact of the gender wage gap on business performance in Australian financial industries.

 References

Bandiera, O. and Natraj, A., 2013. Does gender inequality hinder development and economic growth? Evidence and policy implications. The World Bank Research Observer, 28(1), pp.2-21.

Barro, R.J., 2013. Inflation and Economic Growth. Annals of Economics & Finance, 14(1).

Blau, F.D. and Kahn, L.M., 2017. The gender wage gap: Extent, trends, and explanations. Journal of Economic Literature, 55(3), pp.789-865.

Blau, F.D., 2016. Gender, inequality, and wages. OUP Catalogue.

Blau, F.D., Ferber, M.A. and Winkler, A.E., 2013. The economics of women, men and work. Pearson Higher Ed.

Cavalcanti, T. and Tavares, J., 2016. The Output Cost of Gender Discrimination: A Model?based Macroeconomics Estimate. The Economic Journal, 126(590), pp.109-134.

Charlesworth, S. and Macdonald, F., 2014. Australia’s gender pay equity legislation: how new, how different, what prospects?. Cambridge Journal of Economics, 39(2), pp.421-440.

Cuberes, D. and Teignier, M., 2014. Gender inequality and economic growth: A critical review. Journal of International Development, 26(2), pp.260-276.

DiPrete, T.A. and Buchmann, C., 2013. The rise of women: The growing gender gap in education and what it means for American schools. Russell Sage Foundation.

Fitzenberger, B., Koenker, R. and Machado, J.A. eds., 2013. Economic applications of quantile regression. Springer Science & Business Media.

Hossain, M., Mathbor, G.M. and Semenza, R., 2013. Feminization and Labor Vulnerability in Global Manufacturing Industries: Does Gendered Discourse Matter?. Asian Social Work and Policy Review, 7(3), pp.197-212.

Jensen, R., 2012. Do labor market opportunities affect young women's work and family decisions? Experimental evidence from India. The Quarterly Journal of Economics, 127(2), pp.753-792.

Juhn, C., Ujhelyi, G. and Villegas-Sanchez, C., 2014. Men, women, and machines: How trade impacts gender inequality. Journal of Development Economics, 106, pp.179-193.

Kabeer, N. and Natali, L., 2013. Gender Equality and Economic Growth: Is there a Win?Win?. IDS Working Papers, 2013(417), pp.1-58.

Kabeer, N. and Natali, L., 2013. Gender Equality and Economic Growth: Is there a Win?Win?. IDS Working Papers, 2013(417), pp.1-58.

Kuhn, P. and Shen, K., 2012. Gender discrimination in job ads: Evidence from china. The Quarterly Journal of Economics, 128(1), pp.287-336.

Miller, P.W., 1994. Effects on earnings of the removal of direct discrimination in minimum wage rates: a validation of the Blinder decomposition. Labour economics, 1(3), pp.347-363.

Pervaiz, Z., Chani, M.I., Jan, S.A. and Chaudhary, A.R., 2011. Gender inequality and economic growth: a time series analysis for Pakistan.

Razavi, S., 2012. World development report 2012: Gender equality and development—A commentary. Development and Change, 43(1), pp.423-437.

Richards, E., Theobald, S., George, A., Kim, J.C., Rudert, C., Jehan, K. and Tolhurst, R., 2013. Going beyond the surface: gendered intra-household bargaining as a social determinant of child health and nutrition in low and middle income countries. Social science & medicine, 95, pp.24-33.

Sauré, P. and Zoabi, H., 2011. International trade, the gender gap, fertility and growth. Unpublished Mnuscript.

Schober, T. and Winter-Ebmer, R., 2011. Gender wage inequality and economic growth: is there really a puzzle?—a comment. World Development, 39(8), pp.1476-1484.

Seguino, S., 2011. Gender Inequality and Economic Growth: A Reply to Schober and Winter-Ebmer. World Development, 39(8), pp.1485-1487.

Seguino, S., 2012. Macroeconomics, human development, and distribution. Journal of Human Development and Capabilities, 13(1), pp.59-81.

Smith, I.P., Oades, L. and McCarthy, G., 2013. The Australian Corporate Closet, Why It's Still So Full: A Review of Incidence Rates for Sexual Orientation Discrimination and Gender Identity Discrimination in the Workplace. Gay and Lesbian Issues and Psychology Review, 9(1), p.51.

Smith, M., 2011. Gender equity: The Commission’s legacy and the challenge for Fair Work Australia. Journal of Industrial Relations, 53(5), pp.647-661.

Wang, J. and Gunderson, M., 2012. Minimum wage effects on employment and wages: dif-in-dif estimates from eastern China. International Journal of Manpower, 33(8), pp.860-876.

Wang, J. and Gunderson, M., 2012. Minimum wage effects on employment and wages: dif-in-dif estimates from eastern China. International Journal of Manpower, 33(8), pp.860-876.

Wooden, M., 1999. Gender pay equity and comparable worth in Australia: A reassessment. Australian Economic Review, 32(2), pp.157-171.