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Understanding Wage Inequality in Australia

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  • Arpita Chatterjee
  • Aarti Singh
  • Tahlee Stone

Abstract

In this paper we document rise in wage inequality in Australia over the last decade. A key driver of this inequality is unobservable or residual inequality. We decompose residual wage inequality into permanent and transitory components. The estimates of the permanent shock from the first difference approach allow us to reconcile life-cycle wage inequality.
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Suggested Citation

  • Arpita Chatterjee & Aarti Singh & Tahlee Stone, 2016. "Understanding Wage Inequality in Australia," The Economic Record, The Economic Society of Australia, vol. 92(298), pages 348-360, September.
    • Handle: RePEc:bla:ecorec:v:92:y:2016:i:298:p:348-360
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    File URL: http://hdl.handle.net/10.1111/1475-4932.12263
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    3. Arpita Chatterjee & James Morley & Aarti Singh, 2021. "Estimating household consumption insurance," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 36(5), pages 628-635, August.
    4. Greg Kaplan & Gianni La Cava & Tahlee Stone, 2018. "Household Economic Inequality in Australia," The Economic Record, The Economic Society of Australia, vol. 94(305), pages 117-134, June.
    5. Kamal, Mustafa & Blacklow, Paul, 2021. "Australian age, period, cohort effects in the gender wage gap - 2001 to 2018," Working Papers 2021-02, University of Tasmania, Tasmanian School of Business and Economics.
    6. Ayal Kimhi & Nirit Hanuka-Taflia, 2019. "What drives the convergence in male and female wage distributions in Israel? A Shapley decomposition approach," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 17(3), pages 379-399, September.
    7. David Gunawan & William E. Griffiths & Duangkamon Chotikapanich, 2021. "Posterior Probabilities for Lorenz and Stochastic Dominance of Australian Income Distributions," The Economic Record, The Economic Society of Australia, vol. 97(319), pages 504-524, December.
    8. Yunho Cho & Aarti Singh & James Morley, 2019. "Household Balance Sheets and Consumption Responses to Income Shocks," 2019 Meeting Papers 788, Society for Economic Dynamics.
    9. Arpita Chatterjee & James Morley & Aarti Singh, 2017. "Full Information Estimation of Household Income Risk and Consumption Insurance," Discussion Papers 2017-07, School of Economics, The University of New South Wales.
    10. Owen Freestone, 2018. "The Drivers of Life‐Cycle Wage Inequality in Australia," The Economic Record, The Economic Society of Australia, vol. 94(307), pages 424-444, December.
    11. Cho, Yunho & Morley, James & Singh, Aarti, 2019. "Marginal propensities to consume before and after the Great Recession," Working Papers 2019-11, University of Sydney, School of Economics, revised Sep 2021.
    12. Disney, Richard & Mckay, Andy & Shabab, C Rashaad, 2023. "Household inequality and remittances in rural Thailand: a life-cycle perspective," LSE Research Online Documents on Economics 121207, London School of Economics and Political Science, LSE Library.
    13. Chung Tran & Nabeeh Zakariyya, 2021. "Tax Progressivity in Australia: Facts, Measurements and Estimates†," The Economic Record, The Economic Society of Australia, vol. 97(316), pages 45-77, March.

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