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The gender pay gap is hurting productivity

Tom Kennedy and colleagues write in The Conversation (15.5.7) about the income gap between workers of different gender in Australia, arguing that a 10 per cent reduction in gender income inequality can boost labour productivity by up to 3 per cent.

'Narrowing the wage gap between men and women would not only deliver equal income, but boost Australia’s long-term productivity, our research shows.

'Government data shows that the gender pay gap for full-time employees, across all industries and occupations is 23.1%. This means, on average, that women earn A$26,853 less per year than men.

'We looked at the Australian Bureau of Statistics’ average weekly ordinary time earnings (AWOTE) data from 1986 to 2013, and controlled for other factors that affect labour productivity.

'All else being equal, we found that gender income inequality adversely affects productivity.

'In fact, a 10% reduction in gender income inequality can boost labour productivity by up to 3%. Put another way, eliminating Australia’s existing gender wage gap would lift long-term labour productivity growth by 5.7%.'

 

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