Evaluating the Evidence on Income Inequality in Australia in the 2000s

27 Pages Posted: 6 Mar 2014

See all articles by R Wilkins

R Wilkins

affiliation not provided to SSRN

Date Written: March 2014

Abstract

Published ABS data from the Survey of Income and Housing (SIH) show a substantial increase in income inequality between 2001 and 2010. However, almost all of the increase occurred over a period when changes in survey methodology and income concept were occurring. I present results of analysis of the SIH unit record data, as well as independent evidence provided by the Household, Income and Labour Dynamics in Australia Survey. On the basis of this analysis, I conclude that the SIH overstates the growth in income inequality, even when the income variable examined is notionally consistently defined across surveys. The extent of overstatement is, however, uncertain. Furthermore, it is likely that the picture provided by the SIH data in 2010 is more accurate than the picture provided by the SIH data in 2001 – that is, the ABS is now better measuring income in its household income surveys. Therefore, measured inequality at the start of the decade was too low, rather than measured inequality at the end of the decade being too high.

Suggested Citation

Wilkins, Roger, Evaluating the Evidence on Income Inequality in Australia in the 2000s (March 2014). Economic Record, Vol. 90, Issue 288, pp. 63-89, 2014. Available at SSRN: https://ssrn.com/abstract=2405254 or http://dx.doi.org/10.1111/1475-4932.12090

Roger Wilkins (Contact Author)

affiliation not provided to SSRN

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