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Wage and Income Inequality in Two Welfare States: Australia and Sweden

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  • Peter Saunders
  • Johan Fritzell

Abstract

This paper compares aspects and contrasts of income inequality in Australia and Sweden, focusing on the distribution of wage incomes amongst prime aged full-time workers. After some discussion of the economic and labour market contexts of each country, the development of their wages policies is briefly summarised. This is followed by an analysis, using unit record household income survey data for 1990/91, of the factors contributing to overall income inequality in each country, focusing on the role of earnings, self-employment income and government cash transfer payments. A model is then developed to explain the wage incomes of full-time workers in each country and the model is used to make inequality comparisons which adjust for differences in age structure, industry structure and levels of education. The results indicate that taking account of these adjustments leads to remarkably similar distributions of wage income in each country.

Suggested Citation

  • Peter Saunders & Johan Fritzell, 1995. "Wage and Income Inequality in Two Welfare States: Australia and Sweden," Discussion Papers 0060, University of New South Wales, Social Policy Research Centre.
  • Handle: RePEc:wop:sprcdp:0060
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    File URL: http://www.sprc.unsw.edu.au/dp/dp060.pdf
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    References listed on IDEAS

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    1. Smeeding, Timothy M, et al, 1993. "Poverty, Inequality, and Family Living Standards Impacts across Seven Nations: The Effect of Noncash Subsidies for Health, Education and Housing," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 39(3), pages 229-256, September.
    2. Bruce Bradbury, 1993. "Unemployment And Income Support: Challenges For The Years Ahead," Economic Papers, The Economic Society of Australia, pages 14-31.
    3. Saunders, P. & Bradbury, B., 1991. "Some Australian Evidence on the Consensual Approach to Poverty Measurement," Economic Analysis and Policy, Elsevier, vol. 21(1), pages 47-78.
    4. Peter Saunders & Garry Hobbes, 1988. "Income Inequality in Australia in an International Comparative Perspective," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 21(3), pages 25-34.
    5. Bruce Bradbury, 1989. "The 'Family Package' and the Cost of Children," Discussion Papers 0010, University of New South Wales, Social Policy Research Centre.
    6. Peter Saunders & Johan Fritzell, 1995. "Wage and Income Inequality in Two Welfare States: Australia and Sweden," Discussion Papers 0060, University of New South Wales, Social Policy Research Centre.
    7. Peter Saunders & Michael Fine, 1992. "The Mixed Economy of Support for the Aged in Australia: Lessons for Privatisation," Discussion Papers 0036, University of New South Wales, Social Policy Research Centre.
    8. Peter Saunders & Peter Whiteford, 1990. "Compensating Low Income Groups for Indirect Tax Reform," Discussion Papers 0021, University of New South Wales, Social Policy Research Centre.
    9. Peter Whiteford, 1992. "Are Immigrants Over-represented in the Australian Social Security System?," Discussion Papers 0031, University of New South Wales, Social Policy Research Centre.
    10. Saunders, Peter & Stott, Helen & Hobbes, Garry, 1991. "Income Inequality in Australia and New Zealand: International Comparisons and Recent Trends," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 37(1), pages 63-79, March.
    11. Gerry Redmond, 1999. "Incomes, incentives and the growth of means-testing in Hungary," Fiscal Studies, Institute for Fiscal Studies, pages 77-99.
    12. Russell Ross, 1988. "The Labour Market Position of Aboriginal People in Non-Metropolitan New South Wales," Discussion Papers 001, University of New South Wales, Social Policy Research Centre.
    13. Peter Whiteford, 1988. "Taxation and Social Security: An Overview," Discussion Papers 003, University of New South Wales, Social Policy Research Centre.
    14. Peter Whiteford, 1995. "The Use of Replacement Rates in International Comparisons of Benefit Systems," Discussion Papers 0054, University of New South Wales, Social Policy Research Centre.
    15. Bruce Bradbury, 1988. "Family Size Equivalence Scales and Survey Evaluation of Income and Well-Being," Discussion Papers 005, University of New South Wales, Social Policy Research Centre.
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    Cited by:

    1. Peter Saunders, 1998. "Using Budget Standards to Assess the Well-Being of Families," Discussion Papers 0093, University of New South Wales, Social Policy Research Centre.
    2. Peter Saunders & Cathy Thomson & Ceri Evans, 2000. "Social Change and Social Policy: Results from a Survey of Public Opinion," Discussion Papers 00106, University of New South Wales, Social Policy Research Centre.
    3. Tony Eardley & Peter Saunders & Ceri Evans, 2000. "Community Attitudes Towards Unemployment, Activity Testing and Mutual Obligation," Discussion Papers 00107, University of New South Wales, Social Policy Research Centre.
    4. Bruce Bradbury, 1999. "Tax Theory and Targeting: A Survey," Discussion Papers 00100, University of New South Wales, Social Policy Research Centre.

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