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Job polarisation and earnings inequality in Australia

Author

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  • Michael Coelli

    (Department of Economics, University of Melbourne)

  • Jeff Borland

    (Department of Economics, University of Melbourne)

Abstract

We investigate changes in the occupation structure of employment in Australia between 1966 and 2011, and the effect of these changes on the earnings distribution. There has been substantial growth in the employment share of high skill jobs throughout this period. In the 1980s and 1990s the share of middle skill jobs declined, and the share of low skill jobs rose – consistent with what has become known as job polarisation. In the 1970s and 2000s, however, employment shares of both middle and low skill jobs decreased. Changes in the structure of employment by occupation between 1966 and 2011 are consistent with the loss of jobs that were high in routine task intensity. We find that the changes in the occupational composition of employment, and associated changes in average earnings by occupation, have contributed significantly to growth in overall earnings inequality in Australia from the mid-1980s to the mid-2000s."

Suggested Citation

  • Michael Coelli & Jeff Borland, 2015. "Job polarisation and earnings inequality in Australia," Department of Economics - Working Papers Series 1192, The University of Melbourne.
    • Handle: RePEc:mlb:wpaper:1192
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    References listed on IDEAS

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    Cited by:

    1. Maximilian Longmuir & Carsten Schröde & Matteo Targa, 2020. "De-Routinization of Jobs and Polarization of Earnings: Evidence from 35 Countries," Working Papers 1397, Economic Research Forum, revised 20 Jun 2020.
    2. Garry Barrett, 2018. "The labor market in Australia, 2000–2016," IZA World of Labor, Institute of Labor Economics (IZA), pages 1-11, July.
    3. Jeff Borland & Michael Coelli, 2017. "Are Robots Taking Our Jobs?," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 50(4), pages 377-397, December.
    4. Jeff Borland & Michael Coelli, 2016. "Labour Market Inequality in Australia," The Economic Record, The Economic Society of Australia, vol. 92(299), pages 517-547, December.
    5. Lordan, Grace & Stringer, Eliza-Jane, 2022. "People versus machines: The impact of being in an automatable job on Australian worker’s mental health and life satisfaction," Economics & Human Biology, Elsevier, vol. 46(C).
    6. Michael A. Clemens & Satish Chand, 2023. "Labour Mobility With Vocational Skill: Australian Demand and Pacific Supply," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 56(4), pages 462-486, December.
    7. Shim, Myungkyu & Yang, Hee-Seung, 2018. "Interindustry wage differentials, technology adoption, and job polarization," Journal of Economic Behavior & Organization, Elsevier, vol. 146(C), pages 141-160.
    8. Francisco Azpitarte & Olga Alonso-Villar & Felipe Hugo-Rojas, 2019. "On the Changing Spatial Distribution of Human Capital and Occupation Groups: An Analysis of Recent Trends in Australia’s Main Capital Cities," Working Papers 1903, Universidade de Vigo, Departamento de Economía Aplicada.
    9. Alexis Esposto & Juan Felix Agudelo, 2019. "Casualisation of work and inequality in the Australian labour market," Australian Journal of Labour Economics (AJLE), Bankwest Curtin Economics Centre (BCEC), Curtin Business School, vol. 22(2), pages 53-74.
    10. Michael Coelli & James Maccarrone & Jeff Borland, 2023. "The dragon Down Under: the regional labour market impact of growth in Chinese imports to Australia," Regional Studies, Taylor & Francis Journals, vol. 57(11), pages 2148-2163, November.
    11. Arpita Chatterjee & Aarti Singh & Tahlee Stone, 2016. "Understanding Wage Inequality in Australia," The Economic Record, The Economic Society of Australia, vol. 92(298), pages 348-360, September.
    12. Stephen Bell & Michael Keating, 2019. "Low Wage Growth: Why It Matters and How to Fix It," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 52(4), pages 377-392, December.
    13. Silvia Mendolia & Peter Siminski, 2016. "New Estimates of Intergenerational Mobility in Australia," The Economic Record, The Economic Society of Australia, vol. 92(298), pages 361-373, September.
    14. Lisa Denny, 2019. "Heigh-ho, heigh-ho, it’s off to work we go – the Fourth Industrial Revolution and thoughts on the future of work in Australia," Australian Journal of Labour Economics (AJLE), Bankwest Curtin Economics Centre (BCEC), Curtin Business School, vol. 22(2), pages 117-142.
    15. Ilan Wiesel & Julia de Bruyn & Jordy Meekes & Sangeetha Chandrashekeran, 2023. "Income polarisation, expenditure and the Australian urban middle class," Urban Studies, Urban Studies Journal Limited, vol. 60(14), pages 2779-2798, November.
    16. Hunt, Jennifer & Nunn, Ryan, 2022. "Has U.S. employment really polarized? A critical reappraisal," Labour Economics, Elsevier, vol. 75(C).
    17. Boyd Hunter & Matthew Gray, 2017. "Occupational Mobility of Indigenous and Other Australians," Australian Journal of Labour Economics (AJLE), Bankwest Curtin Economics Centre (BCEC), Curtin Business School, vol. 20(2), pages 149-165.
    18. Kamal, Mustafa & Blacklow, Paul, 2021. "Australian age, period, cohort effects in the gender wage gap - 2001 to 2018," Working Papers 2021-02, University of Tasmania, Tasmanian School of Business and Economics.
    19. Ying Ying Ida Xiao, 2024. "Labour market outcomes of the China shock in Australia," Australian Economic Papers, Wiley Blackwell, vol. 63(S1), pages 135-144, May.
    20. David Gunawan & William E. Griffiths & Duangkamon Chotikapanich, 2021. "Posterior Probabilities for Lorenz and Stochastic Dominance of Australian Income Distributions," The Economic Record, The Economic Society of Australia, vol. 97(319), pages 504-524, December.
    21. David Gunawan & William E. Griffiths & Duangkamon Chotikapanich, 2020. "Posterior Probabilities for Lorenz and Stochastic Dominance of Australian Income Distributions," Papers 2005.04870, arXiv.org, revised Jul 2021.
    22. Quezada, George & Bratanova, Alexandra & Boughen, N & Hajkowicz, Stefan, 2016. "Are you ready for change? Farsight for construction: Exploratory scenarios for Queensland’s construction industry to 2036," MPRA Paper 114021, University Library of Munich, Germany.
    23. Da Silva, António Dias & Laws, Athene & Petroulakis, Filippos, 2019. "Hours of work polarisation?," Working Paper Series 2324, European Central Bank.
    24. Jabłoński Marek, 2019. "Interdependence Among Creativity, Education, and Job Experience: A Municipal Company in Poland," Journal of Management and Business Administration. Central Europe, Sciendo, vol. 27(4), pages 48-70, December.

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    More about this item

    Keywords

    polarisation; technology; inequality; occupation; earnings;
    All these keywords.

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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