Measuring earnings inequality in full-time earnings: an Australian example

Over the last three decades, Australia and many other industrialised nations have seen increasing inequality of earnings. For the US and other countries, the prevailing explanation for the increase in inequality centres on the notion of skill-biased technological change (SBTC). This paper investigates the increase in inequalities in full-time earnings in Australia and its likely causes. The analysis found that earnings inequality for males and females across occupations had increased overall irrespective of the inequality measures used. The paper also explains the causes of earnings inequality using measures of skill and knowledge derived from the O*NET. These findings provide evidence, using average earnings across occupations rather than individual earnings, that support the SBTC hypothesis for full-time work in Australia.