Showcase Report

The Gender Pay Gap in Australia: A Decomposition

How occupation and within-occupation pay combine to produce Australia's gender income gap

Published: June 2026 Author: Verosynthea Research Source: ABS Census 2021 + Bayesian reconstruction

Key Findings

Women are 8.3 percentage points less likely than men to earn above the national median income
33% of the gap (2.8pp) is explained by men and women working in different occupations
The remaining 5.5pp operates within the same occupations — different pay for the same job category
Based on 25,401,942 observations from ABS Census 2021 (all working-age Australians)

Where does any income difference between men and women come from: different jobs or different pay?

AUSynth · Australia · May 2026

This is a national analysis covering all of Australia.

Overview

This analysis is part of Verosynthea AUSynth — census-grade Australian population data, privacy-safe by design.

This analysis decomposes any income difference between men and women in Australia. We ask: how much of any difference comes from men and women working in different occupations (occupational segregation), and how much remains within the same occupations (within-occupation difference)? Occupation type is the mediator. The question is whether any income difference operates through OCCUPATIONAL SORTING, or through WITHIN-OCCUPATION income differences, or both.

Exposure (X)

Sex

Male vs Female

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Mediator (M)

Occupation

Clerical and Administrative Workers, Community and Personal Service Workers, Inadequately described, Labourers, Machinery Operators and Drivers, Managers

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Outcome (Y)

Income

Earning above $800-$999 ($41,600-$51,999) per week

What is mediation analysis? Mediation analysis separates an effect into two paths: the indirect effect (operating through the mediator) and the direct effect (everything else). Imagine you discover that students from a particular school earn less after graduation. Why? Two paths: INDIRECT: the school channels students into lower-paying career tracks, which leads to lower pay. DIRECT: employers pay graduates from this school less even in the same role.

How To Read The Effects

Total Effect

What it is: The overall difference in outcome between the two groups
How to read it: A positive value means the comparison group is more likely to achieve the outcome; negative means less likely. Measured in percentage points (pp)

Indirect Effect (ACME)

What it is: The part of the total effect that operates through the mediator
How to read it: If large relative to the total, the mediator is a major pathway. If small, the mediator is not the main story

Direct Effect (ADE)

What it is: Everything that remains after accounting for the mediator
How to read it: A large direct effect means the mediator doesn't explain the relationship; other mechanisms are at work

Proportion Mediated

What it is: What share of the total effect flows through the mediator
How to read it: Higher means the mediator explains more. Shown as n/a when effects pull in opposite directions

Results

Total Effect

-8.25pp

Indirect Effect (through mediator)

-2.75pp

Direct Effect

-5.50pp

33.4% of the total effect operates through the mediator

Comparison: Female vs Male (reference).
Outcome: Earning above $800-$999 ($41,600-$51,999) per week.
Income threshold: $800-$999 ($41,600-$51,999) (national median bracket). Based on 25,401,942 observations.

What Your Data Shows

Women in this area earn 8.3 percentage points less than men, with the gap split roughly evenly between two causes.

About half the gap (2.8 percentage points) comes from occupational segregation -- women working in lower-paying fields. The other half (5.5 percentage points) exists within occupations -- women earning less than men doing the same work.

Both occupational access and within-occupation pay equity contribute here. Patterns like this typically respond to STEM and trade pipelines for women combined with pay transparency and equity measures within existing workplaces -- neither alone addresses the full gap.

What this might mean: Both occupational access and within-occupation pay equity contribute. Addressing the full gap involves both broadening occupational access and closing within-occupation pay differences.

The Numbers

Effect	Point Estimate
Total Effect (TE)	-0.0825
Indirect Effect (ACME)	-0.0275
Direct Effect (ADE)	-0.0550
Proportion Mediated	33.4%

Cite this report

Verosynthea AUSynth v1.0 (2026). The Gender Pay Gap in Australia: A Decomposition. https://verosynthea.com/showcase/gender-pay-gap-australia

This report is published under Creative Commons BY 4.0. You may share and adapt it for any purpose, including commercial, provided you give appropriate credit.
AUSynth by Verosynthea · verosynthea.com