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Income Inequality, Mobility And Economic Insecurity In Australia

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Abstract
In this paper we analyze income inequality and mobility using the first six waves of the HILDA (Household Income and Labour Dynamics in Australia) panel survey. The mobility of Australian incomes is measured and our evidence suggests that domestic wages and salaries are slightly less mobile than incomes in some other developed countries. This mobility is investigated in greater detail and it is found that much of the intertemporal variation occurs in the middle and lower end of the income distribution. Lastly we recognize that the mobility of an individual�s income may be used as a measure of economic insecurity and we present measures of permanent income inequality that account for this phenomenon. We find that permanent income inequality increases substantially when adjustments to account for aversion to volatility are performed.

Suggested Citation

  • Nicholas Rohde & Kam Ki Tang & Prasada Rao, 2010. "Income Inequality, Mobility And Economic Insecurity In Australia," Discussion Papers Series 407, School of Economics, University of Queensland, Australia.
    • Handle: RePEc:qld:uq2004:407
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    File URL: https://economics.uq.edu.au/files/44712/407.pdf
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    References listed on IDEAS

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    1. Ann Harding, 1997. "The Suffering Middle: Trends in Income Inequality in Australia, 1982 to 1993–94," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 30(4), pages 341-358, December.
    2. Allanson, Paul, 2008. "On the characterisation and measurement of the welfare effects of income mobility from an ex-ante perspective," SIRE Discussion Papers 2008-48, Scottish Institute for Research in Economics (SIRE).
    3. Richard Blundell & Ian Preston, 1998. "Consumption Inequality and Income Uncertainty," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 113(2), pages 603-640.
    4. Leigh Andrew, 2007. "Intergenerational Mobility in Australia," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 7(2), pages 1-28, December.
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    6. Rolf Aaberge & Anders Björklund & Markus Jäntti & Mårten Palme & Peder J. Pedersen & Nina Smith & Tom Wennemo, 2002. "Income Inequality and Income Mobility in the Scandinavian Countries Compared to the United States," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 48(4), pages 443-469, December.
    7. Atkinson, Anthony B., 1970. "On the measurement of inequality," Journal of Economic Theory, Elsevier, vol. 2(3), pages 244-263, September.
    8. Richard V. Burkhauser & John G. Poupore, 1997. "A Cross-National Comparison Of Permanent Inequality In The United States And Germany," The Review of Economics and Statistics, MIT Press, vol. 79(1), pages 10-17, February.
    9. Shorrocks, Anthony, 1978. "Income inequality and income mobility," Journal of Economic Theory, Elsevier, vol. 19(2), pages 376-393, December.
    10. repec:bla:revinw:v:48:y:2002:i:4:p:443-69 is not listed on IDEAS
    11. Jarvis, Sarah & Jenkins, Stephen P, 1998. "How Much Income Mobility Is There in Britain?," Economic Journal, Royal Economic Society, vol. 108(447), pages 428-443, March.
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    Cited by:

    1. Paul Gregg & Rosanna Scutella & Claudia Vittori, 2012. "Earnings Mobility and Inequality: An Integrated Framework," The Centre for Market and Public Organisation 12/295, The Centre for Market and Public Organisation, University of Bristol, UK.
    2. Olga Cantó & David O. Ruiz, 2015. "The Contribution of Income Mobility to Economic Insecurity in the US and Spain during the Great Recession," Research on Economic Inequality, in: Measurement of Poverty, Deprivation, and Economic Mobility, volume 23, pages 109-152, Emerald Group Publishing Limited.

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