Education has been long recognised as an important tool for improving labour market outcomes, such as earnings and employment, as well as non-market outcomes such as health, longevity, civic participation and criminal activity.1 More recently, governments have used education to improve gender equality, not only out of concerns for fairness, but also because it is linked to a country's overall economic performance. More gender-equal workplaces, industries and occupations have been shown to have higher levels of workforce productivity. Reductions in gender inequality are also linked to strong or accelerated economic growth.2 Despite this, gender-based gaps in economic and social outcomes persist in many societies.
In the labour market, it remains unclear how policy efforts to reduce gender gaps in education impact on employment outcomes, which, by and large, continue to be unfavourable for women.3 This is mainly because of conflicting results borne out by studies that use different data sets or measures and models and employ divergent methodological approaches to econometric modelling issues. This means that even when there is a sound theoretical framework for how gender gaps in education impact on economic growth, the empirical evidence for testing how this relationship manifests in the labour market has not been straightforward.4
The case of Australia presents an interesting conundrum. In 2020 and in 2021, the World Economic Forum (WEF) ranked the country first in gender equality in educational attainment, which means Australia has closed the education gender gap ahead of the 150 countries that were covered in the report (WEF 2020; WEF 2021). However, the 2021 WEF report ranked Australia 70 out of 150 countries in terms of equality in economic performance and opportunity, down 21 places from 2020.5 The clear implication is that Australia’s success in achieving gender equality in education is not translating into better outcomes for women in the labour market. This raises concerns on both moral and economic fronts. Society has a moral imperative to ensure that women have, in equal measure as men, access to the right to work by choice and in conditions of dignity, safety and fairness. At the same time, reducing gender gaps in the labour market could also substantially boost gross domestic product, accelerate sustainable growth and development, and improve living standards for all (Nica 2019; Nguyen 2021; Lagerlöf 2003).
This paper uses duration modelling techniques to gain insight into the country’s graduate labour market and analyse why gender inequality persists despite strong education outcomes. Data from the Household, Income and Labour Dynamics in Australia survey (HILDA) is used to understand the role of higher education in employment outcomes and examine education underutilisation in the Australian graduate labour force. Overall, this study aims to identify the market and non-market factors that drive the disparity between tertiary-educated men and women in labour market outcomes.
Duration modelling has been used many times before to analyse labour market transition issues, but none of these studies have used this approach to explain differential labour market outcomes for tertiary-educated men and women. While duration modelling studies of labour market outcomes rarely distinguish between outcomes for men and women, some can provide useful starting points for our paper. For instance, Nickell (1979) finds that in the UK, each year of schooling up to 12 years reduces the expected duration of unemployment by over 4 per cent, and that the acquisition of qualifications beyond ordinary level (i.e. secondary) reduces the expected unemployment duration by 12 per cent. Farber (2004) finds that among people who have recently lost jobs, those with higher levels of education have higher post-displacement employment rates and are more likely to be re-employed full-time.
To our knowledge, this study is the first to systematically investigate labour market inequalities between tertiary-educated men and women in Australia using duration modelling techniques. By tracking individuals over a period of years, the paper describes how tertiary-education may increase opportunities for individuals, using such measures as shorter spells of unemployment after graduation, increased probability of landing full-time jobs and better matching of job requirements to training background. It also contributes to the literature on the private and social benefits of investing in tertiary-level education. Results from this study provide a deeper understanding of the role of higher education in achieving gender equity in the Australian labour market, which can help in designing policy strategies to address gendered labour market issues in the long term.
Section 2 presents the conceptual framework and reviews the relevant economic literature. Section 3 discusses the duration modelling approaches used. Section 4 presents the data and summary statistics. Section 5 presents results from the Kaplan-Meier method. Section 6 presents the results and discusses the impact of covariates from the Cox Proportional Hazard regression model approach. Section 7 concludes.
Footnotes
[1] Card (2001); Grossman (2005); Oreopoulos and Salvanes (2009); Machin et al. (2011).
[2] See Klasen (2018) for a recent cross-country comparison. Also, Benos and Zotou (2014) for an exhaustive survey of the literature on the
impact of gender inequality on growth.
[3] In their meta-regression analysis of 57 studies, Benos and Zotou (2014) could not claim consensus.
[4] See Lucas (1988), Lagerlof (2003) and Stotky (2006) for excellent discussions on alternative theoretical models.
[5] Australia ranked 44th and 50th overall in 2020 and 2021; For 2020 and 2021, Australia ranked 104th and 99th in Health and Survival dimension, respectively, and 57th and 54th in the political empowerment dimension, respectively. Overall, considering all the four components, the ranking of Australia in the Global Gender Gap Index was 44 in 2020 and 50 in 2021 (WEF 2020; WEF 2021).
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