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Economic Adjustment and Distributional Change: Income Inequality and Poverty in Australia in the Eighties

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  • Peter Saunders

Abstract

This paper reviews a range of evidence on the developments in inequality and poverty in Australia during the 1980s. It begins by describing the policy context against which those developments occurred, focusing initially on an account of the main features of wage, tax and transfer policies. This is followed by an overview of economic performance in Australia compared with the OECD region as a whole, and a more detailed account of specific labour market developments. Several aspects of the trends in income inequality are then described, including the change in mean incomes, in aggregate and by income unit type, as well as distributional measures of the change in the degree of inequality of gross income, net income and equivalent net individual income. A decomposition of overall income inequality by income unit type and according to the number of earners in the unit reveals that inequality within groups contributed more to overall inequality than inequality between groups, and that the change in within-group inequality dominated the change in between-group inequality over the period. Finally, the paper uses the Henderson poverty line framework to estimate the trend in relative poverty, both before and after housing costs. The sensitivity of these estimates to variations in the level of the poverty line is then explored, this revealing that the estimated rise in poverty does not depend upon the use of a specific income benchmark to measure poverty.

Suggested Citation

  • Peter Saunders, 1993. "Economic Adjustment and Distributional Change: Income Inequality and Poverty in Australia in the Eighties," Discussion Papers 0047, University of New South Wales, Social Policy Research Centre.
    • Handle: RePEc:wop:sprcdp:0047
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    File URL: http://www.sprc.unsw.edu.au/dp/dp047.pdf
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    References listed on IDEAS

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    1. Peter Saunders, 1994. "The Role, Value and Limitations of Poverty Research," Discussion Papers 0053, University of New South Wales, Social Policy Research Centre.
    2. Sheila Shaver, 1992. "Body Rights, Social Rights and the Liberal Welfare State," Discussion Papers 0038, University of New South Wales, Social Policy Research Centre.
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    Cited by:

    1. Joseph E. Mullat, 2001. "Judging Social Welfare Policy with the Solving of the Bargaining Problem," Public Economics 0112007, University Library of Munich, Germany, revised 04 Mar 2006.
    2. Don Weatherburn & Bronwyn Lind, 1999. "Crime Prevention: The Role of Economic and Social Support," Agenda - A Journal of Policy Analysis and Reform, Australian National University, College of Business and Economics, School of Economics, vol. 6(4), pages 309-324.

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