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Discussion

An increase in the age of workers by one unit was found to increase the log wage of

Australian workers while an increase in age squared was found to reduce the log of wage

workers. An increase in age leads to rising in work experience that makes workers more

efficient. Therefore such workers are subject to higher wages. A similar observation on the

relationship between age and wages was found by Börsch-Supan and Weiss, (2016). It was found

that the workers who had more experience made fewer errors in the production line. Therefore,

their output was higher than the newly employed workers. According to Katovich and Maia,

(2018) productivity is positively influenced by the wage level in any sector of the economy.

However, institutional elements like labor formulation and minimum wage have equal effects.

A rise in the number of university education above one was observed to have a positive

impact on the wages level of the workers. University education gives workers skills that help

them to produce higher quality products. In addition, workers with educational training become

productive as the years’ experience increases. Therefore, the wage level rises due to increasing

productivity by the workers. A similar observation was made by Tansel (2017), it was found that

an increase in one year of schooling resulted in about 14% in wage rise. The study found that

women have a high economic benefit due to a rise in educational attainment than men.

Therefore, education helps to bridge the gap in gender inequality.

A rise in the number of vocational training among Australia workers was found to

increase the wages of the workers. It is because vocational training increases the skills of the

workers that leads to more participation in the labor market. On the other hand, the relationship

between not finish twelve years of schooling was found to be negative. The workers who did not

finish school did not have good productivity that negatively affected their wages. The finding of
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the present study is similar to what was observed by Tansel (2017), that poor educational

attainment has a negative effect on the productivity of the workers.

Conclusion

Wages have a positive relationship with the age of the workers and educational

attainment. The workers with a higher level of education are more productive, therefore, are paid

a higher wage. On the other hand, an increase in age increases the workers' experience that

makes them more productive. Workers with higher productivity have a high wage rate. Poor

educational attainment was found to reduce the productivity of the workers. It is because those

workers are unskilled that makes them have a lower output level. On the other hand, vocational

training has a positive relationship with the productivity of the workers. Those workers are

unskilled and cannot participate in any specialized economic work. It is because workers with

vocational training have a higher output level. The vocational trained workers are semi skill and

have a higher output level that those who are unskilled.

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References

Börsch-Supan, A., & Weiss, M. (2016). Productivity and age: Evidence from work teams at the

assembly line. The Journal of the Economics of Ageing, 7, 30-42.

Katovich, E. S., & Maia, A. G. (2018). The relation between labor productivity and wages in

Brazil: a sectoral analysis. Nova Economia, 28(1), 7-38.

Tansel, A. (2017, March). Returns to education in turkey: IV estimates from a developing

country. In Economic Research Forum (ERF) 23rd Annual Conference (pp. 18-20).