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New Zealand inequality and the struggle between capital and labour

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  • Krawczyk, Jacek B
  • Townsend, Wilbur

Abstract

This paper examines whether changes in New Zealand income inequality can be attributed to the shares of national income taken by capital and labour. Data on income inequality aggregates both capital income (rents, interest, profits) and labour income (wages and salaries). It is possible that changes in inequality correspond only to changes within the distributions of capital income and labour income, and that a rhetoric which emphasises the struggle between capital and labour is misguided. We find this is not the case: both an econometric analysis of income shares and a historical analysis of major policies demonstrates that the struggle between capital and labour matters.

Suggested Citation

  • Krawczyk, Jacek B & Townsend, Wilbur, 2015. "New Zealand inequality and the struggle between capital and labour," Working Paper Series 19251, Victoria University of Wellington, School of Economics and Finance.
    • Handle: RePEc:vuw:vuwecf:19251
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    File URL: https://ir.wgtn.ac.nz/handle/123456789/19251
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    References listed on IDEAS

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    1. Turnovsky, Stephen J. & Garci­a-Peñalosa, Cecilia, 2008. "Distributional dynamics in a neoclassical growth model: The role of elastic labor supply," Journal of Economic Dynamics and Control, Elsevier, vol. 32(5), pages 1399-1431, May.
    2. Atkinson, Anthony B., 1970. "On the measurement of inequality," Journal of Economic Theory, Elsevier, vol. 2(3), pages 244-263, September.
    3. Krawczyk, Jacek B & Townsend, Wilbur, 2015. "Basic understanding of social inequality dynamics," Working Paper Series 4154, Victoria University of Wellington, School of Economics and Finance.
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