THE GENDER WAGE GAP - A COMPARISON OF AUSTRALIA AND CANADA

Using data from the 1989 Canadian Labour Market Activity Survey and, f or Australia, the 1989-90 Income Distribution Survey, the authors inve stigate the reasons for the significantly lower gender wage gap in Aus tralia than in Canada. Key similarities and differences between these two countries, the authors argue, make them a good basis fur a ''natur al experiment'' to investigate the effects of different labor market i nstitutions. In particular, Australia has a stronger union movement an d a greater degree of centralization in wage determination than Canada , and most of its workers are covered by legally binding minimum worki ng conditions. The authors conclude that several differences between t he countries in labor market structure-notably, a lower rate of return to education, a lower rate of return to labor market experience, and a lower level of wage inequality in Australia than in Canada-are large ly responsible for the smaller gender wage gap in Australia.