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

conference contribution
posted on 2005-01-01, 00:00 authored by Chris DoucouliagosChris Doucouliagos, Phillip Hone, Mehmet UlubasogluMehmet Ulubasoglu
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.

History

Title of proceedings

ACE 05 : Proceedings of the Australian Conference of Economists, 2005

Event

Australian Conference of Economists (34th : 2005: Melbourne, Vic.)

Pagination

1 - 53

Publisher

Blackwell

Location

University of Melbourne

Place of publication

Carlton, Vic.

Start date

2005-09-26

End date

2005-09-28

ISBN-13

9780734026088

ISBN-10

0734026080

Language

eng

Publication classification

E1 Full written paper - refereed

Editor/Contributor(s)

R Dixon

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