Income, wealth and earnings inequality in Australia (original) (raw)
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Male Earnings Inequality, Women's Earnings, and Family Income Inequality in Australia, 1982-2007
Journal of Economic Issues, 2013
In the quarter century after 1982, male earnings inequality increased substantially in most industrialized countries, as did women's participation in paid work. Both trends impacted family income inequality. However, this paper's analysis of Australian data shows that the impact of women's earnings on family income inequality changed over the study period of 1982 to 1995-1996. During the same time frame, the growth in women's earnings was concentrated in households with high male earnings, pushing family income inequality higher. However, after 1995-1996, the growth in women's earnings had a moderating influence on family income inequality as it was concentrated in households with lower male earnings. These findings contribute new evidence on the importance of trends in family formation and the correlation of husbands' and wives' earnings to the evolution of family income inequality. The evidence is also suggestive of a dynamic relationship between rising family income inequality and women's participation in paid work that echoes Thorstein Veblen ([1899] 2008) and James Duesenberry's (1952) ideas regarding the importance of relative income and emulation. earnings inequality, emulation, family income inequality, relative income, women's earnings D31, J21, J22 In line with the experience of many other industrialized countries, Australia's labor market has experienced dramatic change in recent decades. Male wage and earnings inequality has increased substantially (see Gottschalk and Danziger 2005, for U.S. evidence; Acemoglu 2002 and Hornstein et al. 2005, for an overview of international trends; and Keating 2003, for recent Australian data). The labor market has also become increasingly feminized as a result of a large increase in women's involvement in paid work. Between the 1986 and 2006 Australian censuses, for example, the female labor-force-participation rate grew from 48 to 58 percent and women's share of total employment (measured in jobs) rose from 40 to 46 percent (ABS 2009) (see Goldin 2006, for international data). The historically dominant role of male earnings in the composition of family income typically yields a close relationship between male earnings inequality and family income inequality (see Gottschalk and Danziger 2005