For Richer, For Richer

Tony Atkinson and I have a paper out today on trends in Australian inequality from 1921-2002. The abstract:

Using taxation statistics, we estimate the income share held by top income groups in Australia over the period 1921-2002. We find that the income share of the richest fell from the 1920s until the mid-1940s, rose briefly in the post-war decade, and then declined until the early-1980s. During the 1980s and 1990s, top income shares rose rapidly. At the start of the twenty-first century, the income share of the richest was higher than it had been at any point in the previous fifty years. Among top income groups, recent decades have also seen a rise in the share of top income accruing to the super-rich. Trends in top income shares are similar to those observed among other elite groups, such as judges, politicians, top bureaucrats and CEOs. We speculate that changes in top income shares may have been affected by top marginal tax rates, skill-biased technological change, social norms about inequality, and the internationalisation of the market for English-speaking CEOs.

The paper and a media release are on my website. Sir Tony and I also have a paper on trends in New Zealand over the same time frame.

We started this paper three years ago, and the amount of work involved in it was immense. Every dot point you see in the graphs is based on twenty to forty numbers from the taxation statistics. Trawling the archives to dig up taxation statistics and national accounts numbers back to 1921 isn’t recommended unless you have a dust and RSI-fetish. But I’m really pleased with the results, which allow us to see how the rich and the super-rich have fared over a very long time period.

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5 Responses to For Richer, For Richer

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  2. Sam F says:

    I notice theres’s an article in today’s Age about this.

    Number 4 in Today’s Top 10 Articles!

    http://www.theage.com.au/articles/2006/03/14/1142098463260.html

  3. Ben Ticehurst says:

    Congratulations Andrew on an important and thorough research paper. Your efforts in encouraging cool-headed analysis of the effects of economic policies are to be applauded.

  4. harry clarke says:

    Its an impressive piece of work. It is about individual not household incomes though. I wonder how that affects things. Individual incomes can be on the low side but household incomes quite reasonable. This affects things across the whole distribution. I think the role of increasing female labour force participation in pushing down wages at the low end of the scale but raising total family incomes is worth a look.

    Interested in your finding that things were much less equal prior to 1950s. Well-done.

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