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Purpose: The purpose of this study is to examine the effects of health on wages of Australian workers, with a focus on gender differences and the role of macroeconomic conditions in the effects. Design/methodology/approach: The first 15 waves of the Household, Income and Labour Dynamics in Australia survey are used to estimate a wage model that accounts for the endogeneity of health, unobserved heterogeneity and sample selection bias. Findings: The results show that, after accounting for the endogeneity of health, unobserved heterogeneity and sample selection bias, better health increases wages for Australian male workers, but not for female workers. The results also show that accounting for the endogeneity of health, unobserved heterogeneity and potential sample selection bias is important in estimating the effects of health on wages. In particular, a simple ordinary least squares estimator would underestimate the effect of health on wages for males, while overestimate it for females, and simply addressing the endogeneity of health using instrumental variables could overestimate the effect for both genders. It is also found that the effects of health on wages fall under depressed macroeconomic conditions, perhaps due to reduced job mobility and increased presentism during a recession. Originality/value: This study adds to the international literature on the effects of health on wages by providing empirical evidence from Australia. The model applied to estimate the effects takes advantage of a panel dataset to address the bias resulting potentially from all the sources of the endogeneity of health, unobserved heterogeneity and sample selection. The results indeed show that failing to address these issues would substantially bias the estimated effects of health on wages. [ABSTRACT FROM AUTHOR]

Australia was long recognized for its relatively compressed wage structure. From the 1940s to the 1970s this was associated with a comprehensive regime of 'award-based' minimum wages. Since the 1980s, this has been subjected to comprehensive 'modernization'. After three decades of reform and in the most supportive economic environment in the OECD, Australian wage inequality has deepened. Although multiple political-economic forces have been at play, the evolution of Australia's labour standards regime is an example of 'institutional plasticity' whereby the purpose and operations of wage-setting institutions not only evolves but can actually be inverted over time. [ABSTRACT FROM AUTHOR]

Junior rates involve a system of minimum wages, defined as a proportion of the adult minimum wage, with this proportion increasing with age until the junior worker is considered an adult at age 21. This system is perceived to be discriminatory, and it is this perception that has led to extensive debate as to the potential replacement of junior rates with an alternative system of minimum wage determination. The debate with regard to junior rates is of particular interest from a labour economics perspective as it brings together two very topical areas of ongoing research, that pertaining to minimum wages, and that to the youth labour market.

The debate in Australia about youth wages and youth employment has been underway for a decade. It has generated much heat because no one in their right mind wants to do anything that would harm young people. Many critical aspects of the current situation need illumination, however, for a sensible reform path for youth wages to be found. On close inspection, the case for fundamental reform of youth minimum wage provisions is compelling. Virtually all nations have minimum wage laws. What distinguishes Australia is the system for setting minimum wages. Whereas other countries legislate minimum wage laws directly through parliament, in Australia these are set by independent industrial tribunals.

Studies the relationship between youth wages and employment using labor market data from Australia and the State of Queensland. Governments' use of policies to increase job offers to young workers; Australian government's introduction of a system of training wages; Increase of human capital of young workers.