IDEAS home Printed from https://ideas.repec.org/p/iae/iaewps/wp2003n19.html
   My bibliography  Save this paper

The Effects of Changes in Family Composition and Employment Patterns on the Distribution of Income in Australia: 1982 to 1997-1998

Author

Listed:
  • David Johnson

    (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne)

  • Roger Wilkins

    () (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne)

Abstract

We examine income and expenditure distributions over the last two decades using Australian Bureau of Statistics unit record data, presenting both nonparametric kernel density estimates and summary measures of the distributions. Standard errors of summary measures are also reported to facilitate assessments of the statistical significance of inferred distributional changes. The results show that there was a significant increase in private income inequality over the 1980s and 1990s, with most of the increase occurring by the early 1990s. However, the increase in dispersion for disposable income was modest, implying taxes and transfers acted to mitigate the increases in inequality emanating from changes in private income. Using a semiparametric procedure developed by DiNardo, Fortin and Lemieux (1996), we examine the effects on the distribution of private income of changes in the family type composition of the population and changes in the distribution across families of employment, educational attainment and number and ages of dependent children. We find that half of the increase in private income inequality is explained by changes in these characteristics. Changes in the distribution of work across families - for example, an increase in both two-earner families and no-earner families - were the single most important source of the increase in private income inequality, with such changes on their own accounting for half the increase in inequality. Changes in the family type composition of the population also acted, to a lesser extent, to increase inequality. Changes in demographic characteristics (the age, education and country of birth composition of the population) acted to reduce income inequality, while changes in the distribution of the number and ages of dependent children across families had no effect on income inequality.

Suggested Citation

  • David Johnson & Roger Wilkins, 2003. "The Effects of Changes in Family Composition and Employment Patterns on the Distribution of Income in Australia: 1982 to 1997-1998," Melbourne Institute Working Paper Series wp2003n19, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
  • Handle: RePEc:iae:iaewps:wp2003n19
    as

    Download full text from publisher

    File URL: http://melbourneinstitute.unimelb.edu.au/downloads/working_paper_series/wp2003n19.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Borland, J., 1998. "Earnings Inequality in Australia: Changes, Causes and Consequences," CEPR Discussion Papers 390, Centre for Economic Policy Research, Research School of Economics, Australian National University.
    2. 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.
    3. Barrett, Garry F & Crossley, Thomas F & Worswick, Christopher, 2000. "Consumption and Income Inequality in Australia," The Economic Record, The Economic Society of Australia, vol. 76(233), pages 116-138, June.
    4. Biewen, Martin, 2002. "Bootstrap inference for inequality, mobility and poverty measurement," Journal of Econometrics, Elsevier, vol. 108(2), pages 317-342, June.
    5. Peter Dawkins & Paul Gregg & Rosanna Scutella, 2002. "The Growth of Jobless Households in Australia," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 35(2), pages 133-154, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Michael Keating, 2003. "The Labour Market and Inequality," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 36(4), pages 374-396, December.
    2. Salverda, Wiemer & Checchi, Daniele, 2014. "Labour-Market Institutions and the Dispersion of Wage Earnings," IZA Discussion Papers 8220, Institute of Labor Economics (IZA).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ramani Gunatilaka & Duangkamon Chotikapanich, 2006. "Inequality Trends and Determinants in Sri Lanka 1980-2002: A Shapley Approach to Decomposition," Monash Econometrics and Business Statistics Working Papers 6/06, Monash University, Department of Econometrics and Business Statistics.
    2. Judith Clarke & Nilanjana Roy, 2012. "On statistical inference for inequality measures calculated from complex survey data," Empirical Economics, Springer, vol. 43(2), pages 499-524, October.
    3. George Athanasopoulos & Farshid Vahid, 2003. "Statistical Inference and Changes in Income Inequality in Australia," The Economic Record, The Economic Society of Australia, vol. 79(247), pages 412-424, December.
    4. Heshmati, Almas, 2004. "A Review of Decomposition of Income Inequality," IZA Discussion Papers 1221, Institute of Labor Economics (IZA).
    5. Davidson, Russell & Flachaire, Emmanuel, 2007. "Asymptotic and bootstrap inference for inequality and poverty measures," Journal of Econometrics, Elsevier, vol. 141(1), pages 141-166, November.
    6. Allanson, Paul, 2008. "On the characterisation and measurement of the welfare effects of income mobility from an ex-ante perspective," SIRE Discussion Papers 2008-48, Scottish Institute for Research in Economics (SIRE).
    7. Luc Arrondel & Nicolas Frémeaux, 2016. "‘For Richer, For Poorer’: Assortative Mating and Savings Preferences," Economica, London School of Economics and Political Science, vol. 83(331), pages 518-543, July.
    8. Brulhart, Marius & Traeger, Rolf, 2005. "An account of geographic concentration patterns in Europe," Regional Science and Urban Economics, Elsevier, vol. 35(6), pages 597-624, November.
    9. Shahateet, Mohammed & Al-Tayyeb, Saud, 2007. "Regional consumption inequalities in Jordan: Empirical study," MPRA Paper 57400, University Library of Munich, Germany.
    10. Jeremy Lise & Shannon Seitz, 2011. "Consumption Inequality and Intra-household Allocations," Review of Economic Studies, Oxford University Press, vol. 78(1), pages 328-355.
    11. Emily Rauscher, 2015. "Effects of Early U.S. Compulsory Schooling Laws on Educational Assortative Mating: The Importance of Context," Demography, Springer;Population Association of America (PAA), vol. 52(4), pages 1219-1242, August.
    12. Bruce Headey, 2008. "Poverty Is Low Consumption and Low Wealth, Not Just Low Income," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 89(1), pages 23-39, October.
    13. Timm Bönke & Carsten Schröder & Katharina Schulte, 2010. "Incomes and Inequality in the Long Run: The Case of German Elderly," German Economic Review, Verein für Socialpolitik, vol. 11(4), pages 487-510, November.
    14. Nicolas Frémeaux & Arnaud Lefranc, 2020. "Assortative Mating and Earnings Inequality in France," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 66(4), pages 757-783, December.
    15. Stanley Wood & Liangzhi You & Xiaobo Zhang, 2004. "Spatial Patterns of Crop Yields in Latin America and the Caribbean," Latin American Journal of Economics-formerly Cuadernos de Economía, Instituto de Economía. Pontificia Universidad Católica de Chile., vol. 41(124), pages 361-381.
    16. Watson, Dorothy & Maître, Bertrand & Whelan, Christopher T., 2012. "Work and Poverty in Ireland: An Analysis of CSO Survey on Income and Living Conditions 2004-2010," Research Series, Economic and Social Research Institute (ESRI), number BKMNEXT226, November.
    17. Philippe de Vreyer & Sylvie Lambert, 2019. "Inequality, poverty and the intra-household allocation of consumption in Senegal," Working Papers halshs-02177745, HAL.
    18. Stephen P. Jenkins & Philippe Van Kerm, 2006. "Trends in income inequality, pro-poor income growth, and income mobility," Oxford Economic Papers, Oxford University Press, vol. 58(3), pages 531-548, July.
    19. Timm Bönke & Carsten Schröder, 2014. "European-Wide Inequality in Times of the Financial Crisis," Journal of Income Distribution, Ad libros publications inc., vol. 23(3), pages 7-34, November.
    20. Jens Suedekum, 2006. "Concentration and Specialization Trends in Germany since Re-unification," Regional Studies, Taylor & Francis Journals, vol. 40(8), pages 861-873.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:iae:iaewps:wp2003n19. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sheri Carnegie). General contact details of provider: http://edirc.repec.org/data/mimelau.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.