The Determinants of Relative Wage Change in Australia

This article uses data from 3500 Australian workers to investigate which factors have had a significant influence on microeconomic wage growth over the years 1997 to 2000. The relative importance of four types of factors, outside incomes, demand for labour, workers' relative bargaining strength and category of wage contract, are compared. Basic individual demographic characteristics and some indicators of workers' bargaining power provided most of the explanation for wage changes. Proxy variables for labour demand, while significant and correctly signed, were small in magnitude