Abstract
This paper provides "empirical analysis of the nature of the relationship between economic development of regions and income inequality in Australian sub-state regions. It does so in the context of considering the validity of the 'augmented inverted U' hypothesis and the influence of factors such as the business cycle, political issues, and demographic trends, which are likely to cause income inequality to change over time." Data are from the Australian censuses for the years 1976 and 1981.
Highlights
Inthepast30years manyauthors haveconsidered the relationship between a country's distribution of income and its stage of economic development Following the pioneering work of Kuznets (1955), subsequent writers generally have argued that an "inverted U" or "bellshaped"curveresults when income levels are plotted against income inequality
While there are small differences in Gini coefficients and mean family incomes between the states, considerable variation occurs between the sub-state statistical divisions
Our single equation regression models suggest that labor market conditions, family structure, the conservative or labor bias of recent state governments and geographic remoteness are variables which influence regional income distribution
Summary
Inthepast30years manyauthors haveconsidered the relationship between a country's distribution of income and its stage of economic development Following the pioneering work of Kuznets (1955), subsequent writers generally have argued that an "inverted U" or "bellshaped"curveresults when income levels (horizontalaxis) are plotted against income inequality (vertical axis). With the exceptions of the early studies by Kuznets (1963)andWilliamson(1965),therehasbeenlittleempirical analysis of the nature of the relationship between economic development of regions and income inequality in countries outside the U.S This paper offers such an analysis for Australian sub-state regions. It does so in the context of considering the validity of the "augmented invertedU" hypothesis and the influence offactors such as the business cycle, political issues, and demographic trends, which are likely to cause income inequality to change over time. Published Gini estimates ofincome for families of two or more people follow: Year 1968-69 1973-74
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