The Impact of Health, Education and Housing Outlays upon Income Distribution in Australia in the 1990s

The distributional impact of public expenditure on such programs as health, education and housing is frequently ignored in studies of income distribution. This may bias assessment of both the relative living standards of different types of families at any particular point in time and of trends in income inequality over time. This article provides estimates for the 1990s of the combined distributional impact of public outlays on health, education and housing. The analysis indicates that the major beneficiaries of public outlays on these services are families with children and the aged. The pattern of receipt shows a strong life-cycle effect, with the value of non-cash benefits peaking in the 30s and 40s and rising again in retirement. Non-cash benefits are also shown to have an equalising effect upon income distribution.