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Understanding New Zealand's Changing Income Distribution 1983-98: A Semiparametric Analysis

Author

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  • Dean R. Hyslop

    (New Zealand Treasury)

  • David C. Maré

    (Motu Economic and Public Policy Research)

Abstract

This paper analyses changes in the distribution of equivalised gross household income and income inequality in New Zealand between 1983 and 1998. We analyse the distributional effects of changes in household structure, National Superannuation (old age pension), household socio-demographic attributes and employment outcomes, and in the "economic returns" to such attributes and employment outcomes, using a semiparametric kernel density approach, and assess the impact of these factors on alternative summary measures of inequality over the period. We find that changes in household structure and in the socio-demographic characteristics of households are the main factors contributing to the rise in inequality, while the large changes in the employment outcomes had a more modest impact, and there is little evidence of systematic effects of changes in the economic returns. The results are qualitatively robust to a variety of equivalisation, income, and weighting measures.

Suggested Citation

  • Dean R. Hyslop & David C. Maré, 2003. "Understanding New Zealand's Changing Income Distribution 1983-98: A Semiparametric Analysis," Working Papers 03_16, Motu Economic and Public Policy Research.
    • Handle: RePEc:mtu:wpaper:03_16
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Olympia Bover, 2010. "Wealth Inequality And Household Structure: U.S. Vs. Spain," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 56(2), pages 259-290, June.
    2. Deborah A. Cobb-Clark & Vincent A. Hildebrand, 2006. "The Wealth of Mexican Americans," Journal of Human Resources, University of Wisconsin Press, vol. 41(4).
    3. David Johnston & Wang-Sheng Lee, 2011. "Explaining the Female Black-White Obesity Gap: A Decomposition Analysis of Proximal Causes," Demography, Springer;Population Association of America (PAA), vol. 48(4), pages 1429-1450, November.
    4. Francisco Ferreira, 2010. "Distributions in motion: Economic growth, inequality, and poverty dynamics," Working Papers 183, ECINEQ, Society for the Study of Economic Inequality.
    5. Arthur Grimes, 2004. "New Zealand: A Typical Australasian Ecomony?," Working Papers 04_11, Motu Economic and Public Policy Research.
    6. Michelle Poland & David C Maré, 2005. "Defining Geographic Communities," Urban/Regional 0509016, University Library of Munich, Germany.
    7. Grimes, Arthur, 2005. "Regional and industry cycles in Australasia: Implications for a common currency," Journal of Asian Economics, Elsevier, vol. 16(3), pages 380-397, June.
    8. Arthur Grimes & Andrew Aitken, 2004. "What's the Beef with House Prices? Economic Shocks and Local Housing Markets," Working Papers 04_08, Motu Economic and Public Policy Research.
    9. Juan D. Barón & Deborah A. Cobb‐Clark, 2010. "Occupational Segregation and the Gender Wage Gap in Private‐ and Public‐Sector Employment: A Distributional Analysis," The Economic Record, The Economic Society of Australia, vol. 86(273), pages 227-246, June.
    10. Arthur Grimes, 2006. "Intra & inter-regional industry shocks: A new metric with application to Australasian currency union," New Zealand Economic Papers, Taylor & Francis Journals, vol. 40(1), pages 23-44.
    11. David Black & Yi-Ping Tseng & Roger Wilkins, 2009. "Examining the Role of Demographic Change in the Decline in Male Employment in Australia: A Propensity Score Re-weighting Decomposition Approach," Melbourne Institute Working Paper Series wp2009n24, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
    12. Suzi Kerr & Kit Rutherford, 2008. "Nutrient Trading in Lake Rotorua: Determining Net Nutrient Inputs," Working Papers 08_03, Motu Economic and Public Policy Research.
    13. David C Maré, 2005. "Indirect Effects of Active Labour Market Policies," HEW 0509004, University Library of Munich, Germany.
    14. Jessica Dye & Stephani� Rossouw & Gail Pacheco, 2012. "Well-being of women in New Zealand: The changing landscape," New Zealand Economic Papers, Taylor & Francis Journals, vol. 46(3), pages 273-302, December.
    15. Biewen, Martin, 2012. "Additive Decompositions with Interaction Effects," IZA Discussion Papers 6730, Institute of Labor Economics (IZA).

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    More about this item

    Keywords

    Household income distribution; Inequality; Kernel density estimation;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • I30 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General

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