The ethnic wage gap in Australia - when accounting for linked employer-employee data

The Australian Workplace Industrial Relations Survey 1995 allows for a thorough review of how an employee's ethnic characteristics and English proficiency can affect their levels of hourly earnings. A human capital model is specified, with random effects regression analysis allowing the comparison of appropriately paired data sets. Results reported in this paper suggest that Anglo-Saxon employees earn more than non-Anglo-Saxon employees, just as English speaking employees earn more than non-English speaking % employees. Interestingly, though, it is found that non-Australian-born employees earn more in terms of hourly income than Australian-born employees. Further ethnic segmentation of the data provides considerable insight as to factors that affect the earnings potential of Australia's diverse workforce.