In 2003, part-time employment in Australia accounted for over 42 per cent of the Australian female workforce, nearly 17 per cent of the male workforce, and represented 28 per cent of total employment. Of the OECD countries, only the Netherlands has a higher proportion of working women employed part-time and Australia tops the OECD league in terms of its proportion of working men who are part-time. In this paper Alison Booth and Margi Wood investigate part-time/full-time hourly wage gaps using important new panel data from the new Household Income and Labour Dynamics in Australia Survey. They find that the usual negative part-time wage penalty found in other countries is not found in Australia once unobserved individual heterogeneity has been taken into account. Instead, part-time men and women typically earn an hourly pay premium. They advance some hypotheses as to why there is a positive part-time pay premium.