IDEAS home Printed from https://ideas.repec.org/p/auu/dpaper/514.html
   My bibliography  Save this paper

The Distribution of Top Incomes in Australia

Author

Listed:
  • A.B. Atkinson
  • Andrew Leigh

    (SPEAR Centre, RSSS, ANU)

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.

Suggested Citation

  • A.B. Atkinson & Andrew Leigh, 2006. "The Distribution of Top Incomes in Australia," CEPR Discussion Papers 514, Centre for Economic Policy Research, Research School of Economics, Australian National University.
    • Handle: RePEc:auu:dpaper:514
    as

    Download full text from publisher

    File URL: https://www.cbe.anu.edu.au/researchpapers/CEPR/DP514.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. H. F. Lydall, 1965. "The Dispersion Of Employment Incomes In Australia," The Economic Record, The Economic Society of Australia, vol. 41(96), pages 549-569, December.
    2. repec:bla:ecorec:v:69:y:1993:i:207:p:353-66 is not listed on IDEAS
    3. repec:bla:ecorec:v:52:y:1976:i:140:p:423-42 is not listed on IDEAS
    4. A. B. Atkinson, 2005. "Top incomes in the UK over the 20th century," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 168(2), pages 325-343, March.
    5. repec:bla:ecorec:v:62:y:1986:i:179:p:427-41 is not listed on IDEAS
    6. Peter Saunders & Garry Hobbes, 1988. "Income Inequality in Australia in an International Comparative Perspective," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 21(3), pages 25-34, September.
    7. Bruce Bradbury & Jennifer Doyle & Peter Whiteford, 1990. "Trends in the Disposable Incomes of Australian Families, 1982-83 to 1989-90," Discussion Papers 0016, University of New South Wales, Social Policy Research Centre.
    8. Peter Saunders, 2004. "Examining Recent Changes in Income Distribution in Australia," The Economic and Labour Relations Review, , vol. 15(1), pages 51-73, June.
    9. H. P. Brown, 1957. "Estimation Of Income Distribution In Australia," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 6(1), pages 202-238, March.
    10. Thomas Piketty & Emmanuel Saez, 2003. "Income Inequality in the United States, 1913–1998," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 118(1), pages 1-41.
    11. Peter Saunders, 1993. "Longer Run Changes in the Distribution of Income in Australia," The Economic Record, The Economic Society of Australia, vol. 69(4), pages 353-366, December.
    12. Peter Saunders, 1998. "Household Budgets and Income Distribution over the Longer Term: Evidence for Australia," Discussion Papers 0089, University of New South Wales, Social Policy Research Centre.
    13. J. P. Cox, 1976. "The National Survey of Income, Income Distribution and Temporary Poverty," The Economic Record, The Economic Society of Australia, vol. 52(4), pages 423-442, December.
    14. repec:bla:ecorec:v:62:y:1986:i:176:p:67-81 is not listed on IDEAS
    15. repec:bla:ecorec:v:53:y:1977:i:144:p:475-89 is not listed on IDEAS
    16. Peter Saunders & Helen Stott & Garry Hobbes, 1991. "Income Inequality In Australia And New Zealand: International Comparisons And Recent Trends," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 37(1), pages 63-79, March.
    17. Emmanuel Saez & Michael R. Veall, 2005. "The Evolution of High Incomes in Northern America: Lessons from Canadian Evidence," American Economic Review, American Economic Association, vol. 95(3), pages 831-849, June.
    18. Peter Saunders & Garry Hobbes, 1988. "Income Inequality in Australia in an International Comparative Perspective," Discussion Papers 004, University of New South Wales, Social Policy Research Centre.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Verchere, Alban, 2017. "The Middle-class Collapse and the Environment," Ecological Economics, Elsevier, vol. 131(C), pages 510-523.
    2. Alban Verchere, 2022. "Is social polarization bad for the planet? A theoretical inquiry," Bulletin of Economic Research, Wiley Blackwell, vol. 74(2), pages 427-456, April.
    3. Anthony B. Atkinson & Thomas Piketty & Emmanuel Saez, 2011. "Top Incomes in the Long Run of History," Journal of Economic Literature, American Economic Association, vol. 49(1), pages 3-71, March.
    4. A. B. Atkinson & Andrew Leigh, 2005. "The Distribution of Top Incomes in New Zealand," CEPR Discussion Papers 503, Centre for Economic Policy Research, Research School of Economics, Australian National University.
    5. Atanu Ghoshray & Issam Malki & Javier Ordóñez, 2022. "On the long-run dynamics of income and wealth inequality," Empirical Economics, Springer, vol. 62(2), pages 375-408, February.
    6. Atkinson, Tony & Alvaredo, Facundo, 2016. "Top Incomes in South Africa Over a Century," INET Oxford Working Papers 2016-06, Institute for New Economic Thinking at the Oxford Martin School, University of Oxford.
    7. Fernholz, Ricardo T., 2016. "A Model of economic mobility and the distribution of wealth," Journal of Macroeconomics, Elsevier, vol. 50(C), pages 168-192.
    8. Fernholz, Ricardo & Fernholz, Robert, 2014. "Instability and concentration in the distribution of wealth," Journal of Economic Dynamics and Control, Elsevier, vol. 44(C), pages 251-269.
    9. A. B Atkinson & Andrew Leigh, 2013. "The Distribution of Top Incomes in Five Anglo-Saxon Countries Over the Long Run," The Economic Record, The Economic Society of Australia, vol. 89, pages 31-47, June.
    10. Peter Saunders, 1993. "Longer Run Changes in the Distribution of Income in Australia," The Economic Record, The Economic Society of Australia, vol. 69(4), pages 353-366, December.
    11. Diego Winkelried & Bruno Escobar, 2022. "Declining inequality in Latin America? Robustness checks for Peru," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 20(1), pages 223-243, March.
    12. Francisco Azpitarte, 2014. "Was Pro-Poor Economic Growth in Australia for the Income-Poor? And for the Multidimensionally-Poor?," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 117(3), pages 871-905, July.
    13. Advani, Arun & Koenig, Felix & Pessina, Lorenzo & Summers, Andy, 2020. "Importing Inequality: Immigration and the Top 1 Percent," IZA Discussion Papers 13731, Institute of Labor Economics (IZA).
    14. Burkhauser, Richard V. & Feng, Shuaizhang & Jenkins, Stephen P. & Larrimore, Jeff, 2009. "Recent Trends in Top Income Shares in the USA: Reconciling Estimates from March CPS and IRS Tax Return Data," IZA Discussion Papers 4426, Institute of Labor Economics (IZA).
    15. Bauluz, Luis & Bukowski, Pawel & Fransham, Mark & Lee, Annie Seong & López Forero, Margarita & Novokmet, Filip & Breau, Sébastien & Lee, Neil & Malgouyres, Clément & Schularick, Moritz & Verdugo, Greg, 2023. "Spatial wage inequality in North America and Western Europe: changes between and within local labour markets 1975-2019," LSE Research Online Documents on Economics 121290, London School of Economics and Political Science, LSE Library.
    16. Alejandro Badel & Moira Daly & Mark Huggett & Martin Nybom, 2018. "Top Earners: Cross-Country Facts," Review, Federal Reserve Bank of St. Louis, vol. 100(3), pages 237-257.
    17. Arun Advani & George Bangham & Jack Leslie, 2021. "The UK's wealth distribution and characteristics of high‐wealth households," Fiscal Studies, John Wiley & Sons, vol. 42(3-4), pages 397-430, September.
    18. Audra Bowlus & Émilien Gouin‐Bonenfant & Huju Liu & Lance Lochner & Youngmin Park, 2022. "Four decades of Canadian earnings inequality and dynamics across workers and firms," Quantitative Economics, Econometric Society, vol. 13(4), pages 1447-1491, November.
    19. Mike Pottenger & Andrew Leigh, 2016. "Long-Run Trends in Australian Executive Remuneration: BHP, 1887–2012," Australian Economic History Review, Economic History Society of Australia and New Zealand, vol. 56(1), pages 2-20, March.
    20. Giertz, Seth H., 2007. "The Elasticity of Taxable Income Over the 1980s and 1990s," National Tax Journal, National Tax Association;National Tax Journal, vol. 60(4), pages 743-768, December.

    More about this item

    Keywords

    inequality; Australia;

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • N37 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - Africa; Oceania

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:auu:dpaper:514. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/cpanuau.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.