The OECD has released a new report on inequality. I haven’t had a chance to read it properly yet, but a few points that stand out are:

  • From the mid-1980s to the late-2000s, the incomes of the top decile of Australian households grew by an average of 4.5% per year, by far the fastest income growth enjoyed by high income earners in any OECD country. The average annual growth for the top decile in OECD countries over the period was 1.9%.
  • Low income Australians also saw relatively strong growth from the 80s to the 2000s, growing at an average of 3% per year. Interestingly, the only countries in which low income earners saw stronger gains were Portugal, Ireland, Greece and Spain.
  • Overall inequality in Australia, measured by the Gini coefficient, is slightly higher than the OECD average, though I wouldn’t put too much stock in the small difference between us and the average.
  • We achieve less of a reduction in inequality inequality via taxes and transfers than we did a decade ago.
  • “Labour market trends have been a key driver of inequality in Australia.”
  • The share of income going to the top 1% has roughly doubled since 1980 (which we already knew from Andrew Leigh’s work), while the taxes paid by high income earners have fallen.

I plan to post more detailed analysis when I’ve had a chance to read the full report.