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Understanding New Zealand’s Changing Income Distribution 1983–98: A Semiparametric Analysis

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  • Hyslop, Dean
  • Mare, David

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

  • Hyslop, Dean & Mare, David, 2003. "Understanding New Zealand’s Changing Income Distribution 1983–98: A Semiparametric Analysis," Motu Working Papers 293004, Motu Economic and Public Policy Research.
    • Handle: RePEc:ags:motuwp:293004
    DOI: 10.22004/ag.econ.293004
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    2. Biewen, Martin, 2012. "Additive Decompositions with Interaction Effects," IZA Discussion Papers 6730, Institute of Labor Economics (IZA).
    3. Grimes, Arthur & Aitken, Andrew, 2004. "What’s the Beef with House Prices? Economic Shocks and Local Housing Markets," Motu Working Papers 292995, Motu Economic and Public Policy Research.
    4. 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.
    5. David C. Maré & Michelle Poland, 2005. "Defining Geographic Communities," Motu Working Papers 05_09, Motu Economic and Public Policy Research.
    6. Deborah A. Cobb-Clark & Vincent A. Hildebrand, 2006. "The Wealth of Mexican Americans," Journal of Human Resources, University of Wisconsin Press, vol. 41(4).
    7. Mare, David, 2005. "Indirect Effects of Active Labour Market Policies," Motu Working Papers 292900, Motu Economic and Public Policy Research.
    8. Ferreira , Francisco H. G., 2010. "Distributions in motion: economic growth, inequality, and poverty dynamics," Policy Research Working Paper Series 5424, The World Bank.
    9. 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.
    10. Suzi Kerr & Kit Rutherford, 2008. "Nutrient Trading in Lake Rotorua: Determining Net Nutrient Inputs," Motu Working Papers 08_03, Motu Economic and Public Policy Research.
    11. Grimes, Arthur, 2004. "New Zealand: A Typical Australasian Economy?," Motu Working Papers 292994, Motu Economic and Public Policy Research.
    12. 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.
    13. 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.
    14. 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.
    15. 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.
    16. 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.

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    Keywords

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    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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