Understanding New Zealand’s Changing Income Distribution 1983-98: A Semiparametric Analysis

Posted: 6 Jan 2010 Last revised: 12 Jan 2010

See all articles by David C. Maré

David C. Maré

Motu Economic and Public Policy Research Trust; University of Waikato - Economics

Dean Hyslop

Motu Economic and Public Policy Research

Date Written: October 1, 2003

Abstract

This paper analyses changes in the distribution of equivalised gross household income and income inequality in New Zealand between 1983 and 1998. We analyse the distributional effects of changes in household structure, National Superannuation (old age pension), household socio-demographic attributes and employment outcomes, and in the "economic returns" to such attributes and employment outcomes, using a semiparametric kernel density approach, and assess the impact of these factors on alternative summary measures of inequality over the period. We find that changes in household structure and in the socio-demographic characteristics of households are the main factors contributing to the rise in inequality, while the large changes in the employment outcomes had a more modest impact, and there is little evidence of systematic effects of changes in the economic returns. The results are qualitatively robust to a variety of equivalisation, income, and weighting measures.

Keywords: Household Income, Income Inequality, Distributional Effects, Superannuation, Qualitative analysis

JEL Classification: C01, D31, C51, N37

Suggested Citation

Maré, David C. and Hyslop, Dean R., Understanding New Zealand’s Changing Income Distribution 1983-98: A Semiparametric Analysis (October 1, 2003). Economica, Vol. 72, No. 3, October 2003, Available at SSRN: https://ssrn.com/abstract=1531965

David C. Maré

Motu Economic and Public Policy Research Trust ( email )

PO Box 24390
Wellington, 6021
New Zealand
64-4-9394250 (Phone)

HOME PAGE: http://www.motu.org.nz

University of Waikato - Economics

New Zealand

Dean R. Hyslop (Contact Author)

Motu Economic and Public Policy Research ( email )

Level 1, 93 Cuba Street
P.O. Box 24390
Wellington, 6142
New Zealand

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