The Relationship between Personal Income and Net Worth in Australia

Abstract

AbstractThis article uses data from the Household, Income and Labour Dynamics in Australia (HILDA) Survey to examine the changing distribution of net worth with age. Even after controlling for age, the relationship between income and net worth is positive, except for the older age groups. Inequality falls as age increases. The income poor save in different forms compared with high income individuals of the same age cohort. Holdings of financial assets, especially equity investments and superannuation, are heavily concentrated in the hands of high income earners, while fixed income investments are favoured by the elderly for all income groups.