Gender and Income Inequality in Australia

Abstract

This paper utilizes unit record data from the household, income, and labour dynamics in Australia survey to examine the dynamics within the Australian creative economy. The study employs a mapping methodology to categorize workers across various creative occupations, providing a focused analysis of how human capital influences wages within this sector compared to the general population. To assess the differentiation in the impact of education and work experience on hourly wages, the study applies both quantile regression and ordinary least squares regression techniques. These methods allow for a nuanced comparison between the returns to education and experience for creative workers and the broader workforce. The findings reveal a significant wage gap within the creative sector, indicating that income disparity is more pronounced among creative workers than among the general working population. The study further finds that while returns to education and work experience are comparable within the creative workforce, the general population experiences a much larger return to education—approximately three times greater than the return to experience. This suggests that, for creative workers, the financial benefits of educational investment are less substantial compared to those for other workers. One of the most critical insights from the research is that investing in formal education is less profitable for individuals working in the creative economy than for those in other sectors. Additionally, the study uncovers a notable gender disparity in the profitability of human capital investment, with significant differences observed between creative men and women. These findings contribute to the understanding of wage structures within the creative economy, highlighting the unique challenges faced by workers in this sector. The results have important implications for policymakers and educators, suggesting the need for tailored strategies that address the specific needs of the creative workforce, particularly in terms of education and professional development.