Search results

There is evidence to suggest that market inequality in Australia is growing, driven by growth in labour market inequality. This chapter reports on a study which had the following objectives: (1) to measure the change in earnings inequality over the 1990s; (2) to measure the level and change over time in occupational earnings inequality; and (3) to implement a new approach to explain earnings inequality which involves estimating the cognitive, interactive and motor skills of workers and the return to these skills and using the results to decompose growth in earnings inequality between changes in the distribution of and return to skill and other factors. It is based on the 1996 Income Distribution Survey undertaken by the Australian Bureau of Statistics (ABS) and the chapter is structured as follows: data used in the study is outlined; changes in individual and occupational earnings inequality in Australia is examined and the construction of labour skill indices is described; the return to skill is estimated for various years and the results are used to measure growth in skill-based earnings inequality; conclusions.