The Causes of Changes in the Distribution of Family Income in Australia, 1982 to 1997-98

Abstract

This paper examines income and expenditure distributions over recent decades using unit record data from Australian Bureau of Statistics (ABS) income and expenditure surveys.

The results show that there was a significant increase in private income inequality over the 1980s and 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. 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.