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More pensioners, less income inequality?

Author

Listed:
  • Omoniyi B Alimi

    (University of Waikato)

  • David C Maré

    (Motu Economic and Public Policy Research)

  • Jacques Poot

    (University of Waikato)

Abstract

As is the case in most developed countries, the population of New Zealand is ageing numerically and structurally. Population ageing can have important effects on the distribution of personal income within and between urban areas. The age structure of the population may affect the distribution of income through the life-cycle profile of earnings but also through the spatial-temporal distribution of income within the various age groups. By decomposing New Zealand census data from 1986 to 2013 by age and urban area, this chapter examines the effects of population ageing on spatial-temporal changes in the distribution of personal income to better understand urban area-level income inequality (measured by the Mean Log Deviation index). We focus explicitly on differences between metropolitan and non-metropolitan urban areas. New Zealand has experienced a significant increase in income inequality over the last few decades, but population ageing has slightly dampened this trend. Because metropolitan areas are ageing slower, the inequality-reducing effect of ageing has been less in these areas. However, this urban-size differential-ageing effect on inequality growth has been relatively small compared with the faster growth in intra-age group inequality in the metropolitan areas.

Suggested Citation

  • Omoniyi B Alimi & David C Maré & Jacques Poot, 2017. "More pensioners, less income inequality?," Working Papers 17_02, Motu Economic and Public Policy Research.
  • Handle: RePEc:mtu:wpaper:17_02
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    More about this item

    Keywords

    Inequality; age composition; urbanisation; population aging;
    All these keywords.

    JEL classification:

    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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