Distributional National Accounts for Australia, 1991-2018

We produce estimates of the full distribution of all national income in Australia for the period 1991 to 2018, by combining household survey with administrative tax microdata and adjusting to match National Accounts aggregates. From these estimates, we are able to rigorously document the shifts in income shares over the period, contrasting changes in the distribution of pre-tax and post-tax national income. Comparing Australia to the US and to France, we also compare our new results to traditional household survey-based estimates of inequality. Moreover, we exploit the richness of our unique microdata to shed light on the distribution of national income across and within various population groups not usually identifiable in the tax datasets that underpin reliable top-income estimates. Among our most surprising findings, inequality of post-tax national income is less than inequality of survey-based (post-transfer, disposable) income for Australia. The gender gap in income has stubbornly remained over the past three decades. Finally, we find that Australian inequality of national income is much lower than that of the United States, while it is similar to that of France, although those at the bottom of the income distribution fare better in France than in Australia.

KEY-FINDINGS

• Australian inequality of national income is much lower than that of the United States, while it is similar to that of France, although those at the bottom of the income distribution fare better in France than in Australia.
• The gender gap in income has remained stable over the past three decades.
• Inequality of post-tax national income is less than inequality of survey-based (post-transfer, disposable) income for Australia. [Part of the explanation for this unusual finding lies in the magnitude of capital income accruing to pension funds held by middle-class households in Australia. The other prominent explanation owes to the income concepts used by reference (survey-based) income distributions elsewhere in the inequality literature for Australia. These other studies and raw data sources generally exclude some or most of the post-tax (redistributive fiscal policy) items that our full DINA post-tax income estimates do include.]

AUTHORS

• Matthew Fisher-Post, World Inequality Lab, Paris School of Economics, mfp@psemail.eu
• Nicolas Hérault, Bordeaux School of Economics, University of Bordeaux;
  Melbourne Institute: Applied Economic & Social Research, University of Melbourne, nicolas.herault@u-bordeaux.fr
• Roger Wilkins, Melbourne Institute: Applied Economic & Social Research, University of Melbourne; World Inequality Lab, Paris School of Economics;
  IZA Institute of Labor Economics, r.wilkins@unimelb.edu.au

MEDIA CONTACT

• press@wid.world.com

ACKNOWLEDGEMENTS

For helpful comments and discussions, we thank Rafael Carranza and participants of the IARIW 37th General Conference, the 2nd Australian Workshop on Public Finance, the 2022 Australian Conference of Economists, the 2022 Melbourne Institute Brownbag seminar series and the 2021 World Inequality Conference