The Distribution and Composition of Personal Sector Wealth in Australia

This article begins by noting the scarcity of information on the distribution of wealth in Australia, and the many reasons for wanting to have such information. The potential role of the tax system in affecting the composition of wealth is noted, and the taxation of savings is briefly described. A number of different methods of estimating the distribution of wealth are discussed. Estimates for the distribution and composition of wealth in Australia in 1986 are derived from the 1986 Income Distribution Survey, which suggest that the wealthiest ten per cent of income units hold 55 per cent of total wealth. The composition of wealth is broadly consistent with the expected impact of the tax system.     

The Distribution of Wealth in Australia — A Survey*

This paper surveys and analyzes the available evidence on the distribution of wealth in Australia. On the basis of this evidence, it is argued that the cross-section distribution of personal wealth reveals considerable concentration in the top tail, with the top 1 per cent of adult individuals holding around 25 per cent of private wealth. The inequality of wealth revealed in the cross-section distribution among the top 10 per cent of wealth holders is not significantly reduced when adjustments are made to correct for life-cycle influences. Although the proportion of wealth held by the top 1 per cent of adult individuals has decreased sharply since World War I, the second to tenth percentiles have almost the same proportion in the 1960s and 1970s as in 1915.     

Determinants of Household Weatlh: Assets of Divorcing Couples in Australia

Recent reviews indicate that research on wealth in Australia has been limited by a lack of reliable data. The Economic Consequences of Marital Breakdown Survey containing data on the wealth of couples about to divorce, and items from the National Social Science Survey, provide new data for analysis. Shares of net wealth of housing (55 per cent) and superannuation (1 4 per cent) are comparable to those in previous studies. A 'wealth function' was developed taking account of age, gender, years of schooling and further education. There was a 2.6 per cent gain for each year of age and a decumulation of assets after age 58 years. Each year of schooling adds another 10 per cent to net wealth. There is a 16 per cent gain for those who have undertaken some further education after completing school. Some 22 per cent of adult Australians report ever receiving an inheritance. This new information begins to provide some of the answers on 'how' and, by inference, 'why' Australian households save.     

How Much Do We Know About Wealth Distribution in Australia?

This paper surveys what is known about wealth distribution in Australia and concludes that our knowledge is scanty. The most reliable evidence comes from studies using probate returns and with the abolition of estate duties, these studies are becoming out of date. However, it is clear that wealth is very unequally distributed. The top 5 per cent of adult individuals own between 40 and 50 per cent of the wealth. This inequality is not just due to life cycle effects, and there is no strong evidence that wealth distribution has become more equal in Australia in the period since the First World War.     

The Distribution of Wealth: What Is It,What Does It Mean,and Is It Important?

This paper summarises the available evidence on the present-day distribution of wealth in Australia, and draws comparison with international evidence. With this as background, I argue that an initiative to collect more up-to-date information on Australia's wealth distribution would be most useful if it focused on the least wealthy 90 to 95 per cent of the population, even though this group probably owns not more than half the nation's wealth.     

Wealth and Consumption in Australia

We revisit the evidence on the effect of changes in household wealth on consumption using a panel of Australian states. We find that a one per cent increase in the value of housing wealth increases consumption by about 0.16 per cent in the long-run, with half of the response occurring within two quarters. The size of this response has been stable over time and largely reflects changes in spending on motor vehicles, durable goods and other discretionary items. We then run counterfactual scenarios using the Reserve Bank of Australia's macroeconometric model, MARTIN, to assess the macroeconomic effects of changes in household wealth. We show that increases in household wealth supported household spending between 2013 and 2017, when growth in disposable income was weak.     

Measuring the Level and Inequality of Wealth: An Application to China

We construct and compare three distinct measures of household asset wealth that complement traditional income‐ or expenditure‐based measures of socioeconomic status. We apply these measures to longitudinal household survey data from China and demonstrate that household asset wealth has been increasing over time, a theme consistent with many previous studies on the process of development in China. Unlike other studies that have shown rising income inequality over time, however, we show that asset wealth inequality has actually been declining in recent years, indicating widespread participation in the benefits of economic reforms. Furthermore, the evolution in the cumulative distribution of household welfare is such that social welfare has been increasing with the passage of time, despite rising inequality in the early years of the survey.     

How does female labor force participation impact on housing values?

Female labor force participation (FLFP) and household wealth are two main topics of interests to economists for long time. The objective of this study is to investigate the response of housing values, household wealth, to female labor force participation using panel level data in the U.S. states. We develop static and dynamic estimation models using state-level data in the U.S. from 2005 to 2013. The results show the FLFP rate and per capita income have a strong positive effect on housing values, while the number of units per capita has a negative effect on housing values in the state. We find that a 10% increase in FLFP will result in an increase of about 12.5% on housing values. Additionally, increasing per capita income by 10% on average will cause housing values to rise by 9%, however, a 10% rise in the number of units per capita will decrease housing values by 30%. The results assist economists and policy makers in assessing policies to optimize decisions in labor market and housing market.     

Decomposing Redistributive Effects of Taxes and Transfers in Australia: Annual and Lifetime Measures

This paper decomposes the redistributive effect on annual and lifetime inquality of a range of taxes and transfers in Australia, using a dynamic cohort lifetime simulation model. The redistributive effect is decomposed into vertical, horizontal and reranking effects. Horizontal inequities in the tax and transfer system are found to be negligible. The extent of reranking is greater in the lifetime than in the annual context and is affected by the equivalence scales used to adjust household incomes. If no adjustment is made to household incomes, reranking is about nine per cent of the reduction in lifetime inequality. However, if each child is counted as equivalent to one-third of an adult, reranking is found to be less than one per cent.     

Occupational Status: Why do some Workers Miss Out?

The difference in socioeconomic status between the 'haves' and 'have-nots' is widening in the Australian labour market. This is reflected in the data on both earnings and occupational status. This paper assesses the factors contributing to differences in the occupational attainment of workers with a marginal attachment to the labour market and workers who are part of mainstream Australia. Overall, 94 per cent of the occupational status differential is attributable to the inferior endowments possessed by workers with a marginal attachment to the labour market. Until the disadvantaged workers improve their skills they will not be able to gain access to high status occupations.     

The Australian Growth Experience, 1960–2000: Human Capital,R&D or Steady‐State Growth?

This article examines the sources of economic growth in Australia from 1960 to 2000 by adapting a framework developed in Jones (2002), whereby long‐run growth is driven by the global discovery of new ideas, which in turn is tied to world population growth. We find that, contrary to the conventional view as suggested by sustained growth rates and a stable capital–output ratio over the last several decades, Australia is clearly not on its steady–state balanced growth path. Australia has benefited from increases in educational attainment and research intensity: 42 per cent of Australian growth between 1960 and 2000 is attributable to the rise in educational attainment, about 20 to 40 per cent is attributable to increasing research intensity, while only 10 to 30 per cent is due to long‐run population growth in the idea‐producing countries.     

The Gender Wealth Gap in Europe: Application of Machine Learning to Predict Individual-level Wealth

This article provides comparative estimates of the gender wealth gaps for 22 European countries, employing data from the Household Finance and Consumption Survey. The data on wealth are collected at the household level, while individual-level data are needed for the estimates of gender wealth gaps. We propose a novel approach using machine learning and model averaging methods to predict individual-level wealth data for multi-person households. Our results suggest that random forest performs best as the predicting tool for this exercise, outperforming elastic net and Bayesian model averaging. The estimated gender wealth gaps tend to be in favor of men, especially at the top of the wealth distribution. Men have 24 percent more wealth than women on average. We also find that a high home ownership rate is associated with a smaller country-level gender wealth gap. Our estimates suggest that the individual-level wealth inequality is on average 3 pp higher than the household-level wealth inequality in multi-member households.     

House Prices,Wealth and Consumption: New Evidence from Australia and Canada

Over the past two decades, a number of countries have experienced appreciation in house prices at the same time that aggregate consumption has increased. This paper tests alternative hypotheses for this phenomenon by using repeated household surveys from Australia and Canada to identify the transmission mechanism that links consumption and household wealth. The empirical analysis suggests that neither a direct wealth effect nor a common causal factor likely accounts for the observed correlation between wealth and consumption in these two countries. Rather, indirect factors such as collateral effects arising from relaxation of credit constraints are a more likely explanation.     

THE DISTRIBUTION OF WEALTH IN CANADA

For estimates of the wealth distribution Canada depends on household surveys taken at 6–7 year intervals. The latest data from this source refer to household balance sheets in the spring of 1977. A comparison with 1970 shows that there is little change in the composition of wealth held by households but that inequality of the wealth distribution has been somewhat reduced. Wealth data by age of family head is presented in order to describe more fully the wealth distribution and composition in Canada.
Weaknesses in the data are discussed as well as the difficulties of making appropriate adjustments to the data at the micro record level. For policy evaluation and formulation purposes the lack of comprehensive estimates inclusive of pension wealth as well as the small sample size (12,700 usable records) have been perceived as greater obstacles to utilizing the data than the underestimate in aggregate assets and debts which affects more the higher than the middle and lower ranges of the wealth distribution.     

ESTIMATES OF HOUSEHOLD WEALTH INEQUALITY IN THE U.S., 1962–1983

The study has two major objectives. The first is to determine time trends in household wealth inequality in the U.S. over the 1962–83 period. Four concepts of wealth are analyzed: (i) total household wealth, defined as total household assets less liabilities; (ii) fungible wealth, defined as total household wealth less consumer durables and household inventories; (iii) financial wealth, defined as fungible wealth less equity in owner-occupied housing; and (iv) capital wealth, defined as financial wealth less currency, checking accounts, and time deposits. Relying on a variety of data sources, I find that wealth inequality remained relatively constant from about 1962 to 1973, fell sharply from about 1973 to about 1979, and then rose sharply between 1979 and 1983. Concentration in 1983 was greater than that in 1962 for financial and capital wealth but of similar magnitude for total and fungible wealth. The second, methodological in nature, is to analyze the effect on measured inequality of the alignment of raw survey data to national balance sheet totals. I find that the alignment process can significantly affect point estimates of household wealth distribution but does not generally affect the direction of inequality trends.     

财富不平等会抑制金融素养对家庭借贷行为的作用效果吗*——基于CHFS数据的经验分析

本文基于2013年中国家庭金融调查（CHFS）数据,选用工具变量法,考察了金融素养对城乡家庭借贷行为影响的差异性,并验证了财富不平等扩大会抑制金融素养对家庭借贷行为的影响。研究发现：（1）金融素养是影响家庭借贷行为的重要因素。户主金融素养水平的改善显著提高了家庭发生借贷的概率与家庭借贷规模。（2）金融素养对城乡家庭借贷行为的影响存在明显差异,金融素养的提高对信贷约束较为严重的农村家庭借贷行为的促进作用更大。（3）财富不平等对家庭借贷行为存在明显的抑制作用,财富不平等的扩大减少了家庭借贷需求,降低了家庭发生借贷的概率和家庭负债规模。（4）随着家庭财富不平等程度的扩大,金融素养对家庭借贷行为的促进作用受到抑制。基于以上结论,政府应该大力开展消费者金融素养教育,注重家庭收入分配合理性,从而推动我国消费金融市场的健康发展。     

GENERATING INTERNATIONALLY COMPARABLE INCOME DISTRIBUTION DATA: EVIDENCE FROM THE FEDERAL REPUBLIC OF GERMANY (1974), MEXICO (1968) AND THE UNITED KINGDOM (1979).

In this article an attempt is made to generate internationally comparable income distribution data for the Federal Republic of Germany (1974), Mexico (1968) and the United Kingdom (1979). To that end, the same income concept and income unit were adopted for each country, i.e. respectively household available income and the household. Moreover, incomes from various sources were adjusted for inconsistency with National Accounts according to Altimir's methodology. The paper finds that the distribution of persons by household income per equivalent unit is probably the best way of looking at the distribution of economic welfare. It further demonstrates that the distribution of persons by household available income per capita is much closer to this 'ideal' distribution than the distribution of households by household available income. Finally, the paper discusses some of the problems arising from the fact that one normally works with grouped data. It is found that in the case of the three countries under study, grouping is likely to have had only a small impact on the results.     

中国城镇居民的财产分配

本文利用住户调查数据对 1 995年的中国城镇住户的财产分配状况进行了经验分析 ,包括对财产分配的差距进行了测量 ,影响财产分配的主要因素进行了估计 ,并将中国城镇住户的财产分配进行了国际比较。与大部分市场经济国家相比 ,中国城镇居民之间财产分配的差距并不大。但是中国城镇居民的财产分配差距超过了收入分配差距 ,而且从长期趋势上可能会出现加速扩大的势头。中国城镇居民之间财产分配的不均等并非全是经济市场化过程的结果。一些不均等的原因来自于传统计划经济遗留下来的分配模式。本文还发现 ,在户主一生中财产积累出现了两个高峰值。这是与正统的生命周期理论不同的。本文还表明了财产分配和收入分配之间的较强相关性。     

Sustainability and Wealth of Rural Households: Measurement and Inequality Analysis

A small but growing literature is linking well-being with the value of assets, measured comprehensively. This measure, called comprehensive wealth, has appeared as a leading economic indicator of sustainability by reflecting the potential of future well-being. Despite the concerns of sustainability for policy interventions at the micro-level, the existing literature is limited to country-level estimations. This paper applies the general framework of weak sustainability to measure wealth at the household level. Using data from three rounds of household survey, market prices, and yield data from rural Burkina Faso, we measure wealth, income, and consumption per adult. The results show that wealth has consistently increased over time in contrast to income and consumption which have fluctuated. Wealth is also less unequally distributed. Finally, consumption is found to be more correlated with wealth. This suggests that wealth-based interventions are more likely to improve well-being in a sustainable way.     

Social status pursuit,distribution of bequests and inequality

The quest for social status modifies lifetime decisions and as a consequence, the trajectory of the overall economy. Focusing on the relative wealth dimension of social status, we build a two-period overlapping generations model with heterogeneous agents to investigate the effects of status quest on the evolution of bequest distribution and household inequality. We show that the bequest motive and the concern for social status not only increase the stationary level of capital but also enhance the household equality.