Public-Private Sector Wage Gaps in Australia: Extent, Trends and Gender

Using panel data from the Household, Income and Labour Dynamics in Australia survey, this paper analyses the wage gap between the public and private sectors in Australia from 2001 to 2022. The analysis is conducted at both the national and state levels. We found that, since 2014, the public-sector wage premium (nationally) has increased for women but decreased for men, with women's outcomes driving current trends. Additionally, the public-sector wage premium varies significantly across states, indicating that state-level wage-setting forces are more influential than national ones. Our trend analysis reveals that the premium is neither consistently procyclical nor countercyclical. Furthermore, quantile analysis shows that the premium fluctuates across the wage distribution, though not in a uniform pattern over time.