Career progression, human capital and pay equity in Australian public sector labour markets

Doucouliagos, Chris, Hone, Phillip and Ulubasoglu, Mehmet 2005, Career progression, human capital and pay equity in Australian public sector labour markets, in ACE 05 : Proceedings of the Australian Conference of Economists, 2005, Blackwell, Carlton, Vic., pp. 1-53.

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Title Career progression, human capital and pay equity in Australian public sector labour markets
Author(s) Doucouliagos, Chris
Hone, Phillip
Ulubasoglu, Mehmet
Conference name Australian Conference of Economists (34th : 2005: Melbourne, Vic.)
Conference location University of Melbourne
Conference dates 26-28 September 2005
Title of proceedings ACE 05 : Proceedings of the Australian Conference of Economists, 2005
Editor(s) Dixon, Robert
Publication date 2005
Conference series Australian Conference of Economists
Start page 1
End page 53
Publisher Blackwell
Place of publication Carlton, Vic.
Keyword(s) career progression
pay equity
human capital
endogeneity
two-stage estimation
Summary This study uses data from the Victorian Public Sector Census 2004 to identify the extent of equity in pay and career progression (promotion). A system of three equations is developed to capture the endogeneity between human capital and promotion and the interdependence between promotion, pay and human capital. The results indicate that there are substantial differences in the average wages earned by public sector employees in different Equal Employment Opportunity (EEO) groups. While some of these differences arise from factors beyond the control of the public sector employers, others arise from bias in the public sector employment system and procedures. The earnings of individual employees in the public sector are determined in a systematic way by the wage structures in the different sub-sectors, the skill base of the employee on recruitment, sub-sector specific promotion rates, acquisition of formal and informal training and the apparent bias within recruitment and promotion systems in dealing with particular groups. The apparent bias of recruitment and promotion systems is complex in makeup and varies within EEO groups as well as between EEO groups. Most of the difference in pay across employees can be explained as an outcome of individual choice and labour market conditions external to the public sector. After adjusting for sectoral wage differences, skill base when recruited, sectoral promotion rate differences, experience in the public sector, whether individuals are employed on a full-time or part-time basis and individual training decisions, the statistical evidence is consistent with the finding that public sector recruitment and promotion systems tends to be biased, on average, against females and those from culturally diverse backgrounds. Achievements in formal education are important for salary progression. This is particularly the case for women. The main drivers of participation in formal education were employer support in both financial and non-financial terms. Promotion rates were important factors in explaining wage differences. Women tended to receive slightly fewer promotions than men, but women received, on average, greater rewards for each promotion.
ISBN 0734026080
9780734026088
Language eng
Field of Research 140211 Labour Economics
HERDC Research category E1 Full written paper - refereed
Persistent URL http://hdl.handle.net/10536/DRO/DU:30005629

Document type: Conference Paper
Collection: School of Accounting, Economics and Finance
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