The Changes in New Zealand's Income Distribution
AbstractThis paper summarises recent research on changes in New Zealand’s income distribution. It describes how the income distribution has changed during the period 1981 to 1996. It then looks at factors accounting for these changes in the income distribution. The main focus is on social trends, such as household composition, and changes in individual characteristics, such as age, qualifications and employment status. The first part of the paper looks at trends in the income distribution. This shows that income inequality rose in the 1980s and 1990s in New Zealand. The rate of growth was fastest in the 1980s. New Zealand’s level of income inequality has risen substantially relative to the levels in other OECD countries. Wellbeing measured in income terms depends not just on income at a given point in time, but also on the extent to which that income position persists through time. The second major part of this paper focuses on recent research on income ‘dynamics’. Analyses using tax data show that incomes do vary considerably from period to period. However, there is also a considerable degree of income ‘persistence’. The final part of the paper looks at factors contributing to the increase in income inequality. Changes in household composition, (such as the growth in sole parent households and older households without children), account for some of the increase in household income inequality. A growing proportion of workers in their prime earning years, and with higher educational qualifications, has also increased income inequality. These factors can explain up to 50-60% of the overall increase in income inequality.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by New Zealand Treasury in its series Treasury Working Paper Series with number 00/13.
Length: 113 pages
Date of creation: 2000
Date of revision:
Contact details of provider:
Postal: New Zealand Treasury, PO Box 3724, Wellington, New Zealand
Phone: +64-4-472 2733
Fax: +64-4-473 0982
Web page: http://www.treasury.govt.nz
More information through EDIRC
This paper has been announced in the following NEP Reports:
- NEP-ALL-2001-09-26 (All new papers)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Gardiner, Karen & Hills, John, 1999. "Policy Implications of New Data on Income Mobility," Economic Journal, Royal Economic Society, vol. 109(453), pages F91-111, February.
- Garcia-Penalosa, Cecilia & Aghion, Philippe & Caroli, Eve, 1999. "Inequality and Economic Growth: The Perspective of the New Growth Theories," Economics Papers from University Paris Dauphine 123456789/10091, Paris Dauphine University.
- Shorrocks, A F, 1980. "The Class of Additively Decomposable Inequality Measures," Econometrica, Econometric Society, vol. 48(3), pages 613-25, April.
- Mookherjee, Dilip & Shorrocks, Anthony F, 1982. "A Decomposition Analysis of the Trend in UK Income Inequality," Economic Journal, Royal Economic Society, vol. 92(368), pages 886-902, December.
- Atkinson, A. B. & Bourguignon, F. & Morrisson, C., 1988. "Earnings mobility," European Economic Review, Elsevier, vol. 32(2-3), pages 619-632, March.
- Jarvis, Sarah & Jenkins, Stephen P, 1998. "How Much Income Mobility Is There in Britain?," Economic Journal, Royal Economic Society, vol. 108(447), pages 428-43, March.
- Robert Haveman & Lawrence Buron, 1994.
"The Anatomy of Changing Male Earnings Inequality: An Empirical Exploration of Determinants,"
Economics Working Paper Archive
wp_104, Levy Economics Institute, The.
- Robert H. Haveman & Lawrence Buron, 1999. "The Anatomy of Changing Male Earnings Inequality: An Empirical Exploration of Determinants," Macroeconomics 9906018, EconWPA.
- Parker, Simon C, 1999. "The Inequality of Employment and Self-Employment Incomes: A Decomposition Analysis for the U.K," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 45(2), pages 263-74, June.
- Burtless, Gary, 1999. "Effects of growing wage disparities and changing family composition on the U.S. income distribution," European Economic Review, Elsevier, vol. 43(4-6), pages 853-865, April.
- Peter Gottschalk & Timothy M. Smeeding, 1997. "Cross-National Comparisons of Earnings and Income Inequality," Journal of Economic Literature, American Economic Association, vol. 35(2), pages 633-687, June.
- Sen, Amartya, 1973. "On Economic Inequality," OUP Catalogue, Oxford University Press, number 9780198281931.
- Cecilia Garcia-Penalosa & Eve Caroli & Philippe Aghion, 1999.
"Inequality and Economic Growth: The Perspective of the New Growth Theories,"
Journal of Economic Literature,
American Economic Association, vol. 37(4), pages 1615-1660, December.
- Aghion, Philippe & Caroli, Eve & Garcia-Penalosa, Cecilia, 1999. "Inequality and economic growth: the perspective of the new growth theories," CEPREMAP Working Papers (Couverture Orange) 9908, CEPREMAP.
Blog mentionsAs found by EconAcademics.org, the blog aggregator for Economics research:
- NZ inequality statistics: Some of the research
by Matt Nolan in The Invisible Hand in Economics on 2013-11-25 19:00:32
- Dean R. Hyslop & David C. Maré, 2004. "Understanding New Zealand s Changing Income Distribution 1983 98:A Semiparametric Analysis," Microeconomics 0402014, EconWPA.
- The Treasury, 2001. "Geography and the Inclusive Economy: A Regional Perspective," Treasury Working Paper Series 01/17, New Zealand Treasury.
- Dean Hyslop & Dave Maré, 2001. "Understanding Changes in the Distribution of Household Incomes in New Zealand Between 1983-86 and 1995-98," Treasury Working Paper Series 01/21, New Zealand Treasury.
- 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.
- Ron Crawford & Grant Johnston, 2004. "Household incomes in New Zealand: The impact of the market, taxes and government spending, 1987/88–1997/98," Treasury Working Paper Series 04/20, New Zealand Treasury.
- Sholeh A. Maani & Rhema Vaithianathan & Barbara Wolfe, 2006. "Inequality and Health: Is Housing Crowding the Link?," Working Papers 06_09, Motu Economic and Public Policy Research.
- Social class in New Zealand in Wikipedia (English)
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Web and Publishing Team, The Treasury).
If references are entirely missing, you can add them using this form.