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The long-run determinants of Australian income inequality
The economic record
  • Noel Gaston, Bond University
  • Gulasekaran Rajaguru, Bond University
Date of this Version
Document Type
Journal Article
Publication Details
Gaston, N., & Rajaguru, G. (2009). The long-run determinants of Australian income inequality. The economic record, 85(270), 260-275.

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2009 HERDC submission. FoR code: 1402

Copyright © 2009 The Economic Society of Australia
Recent interest has been stimulated by the growth of income inequality in most developed countries during the 1980s and 1990s. However, considerable uncertainty still exists as to which factors have been the most important causes of this development. This article uses a measure of income inequality derived from taxation statistics and a recently proposed method for testing long-run Granger non-causality to examine the key determinants of Australia's inequality for the years 1970–2001. In line with popular concern, we find that globalisation and technological progress – defined as the global flow of information – has increased income inequality. In contrast, improved terms of trade have been equity-enhancing. Of the institutional determinants, de-unionisation has had an adverse effect on income inequality, whereas higher minimum wages have reduced it.
Citation Information
Noel Gaston and Gulasekaran Rajaguru. "The long-run determinants of Australian income inequality" The economic record Vol. 85 Iss. 270 (2009) p. 260 - 275
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