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NSWEconomicsQuick questions
Topic 3: Economic Issues
Quick questions on Distribution of income and wealth in Australia (HSC Economics Topic 3)
15short Q&A pairs drawn directly from our worked dot-point answer. For full context and worked exam questions, read the parent dot-point page.
What is income vs wealth?Show answer
Income is a flow concept: payments received over a period of time (wages, salaries, profits, dividends, interest, rents, government transfers).
What is measurement?Show answer
The Lorenz curve plots cumulative income share against cumulative population share, ranked from lowest to highest income.
What is the Gini coefficient?Show answer
The Gini coefficient is the area between the Lorenz curve and the 45 degree line, divided by the total area below the 45 degree line.
What is income inequality in Australia?Show answer
The ABS Survey of Income and Housing (cat. no. 6523.0) is the canonical source. Indicative figures (using equivalised disposable household income):
What is wealth inequality?Show answer
Wealth is much more unequally distributed:
What is sources of inequality?Show answer
1. Employment status. Employment is the single biggest determinant. Households where no adult is employed have far lower incomes than dual-earner households.
What is trends?Show answer
Australian income inequality has been relatively stable over the past two decades (Gini 0.32 to 0.34), in contrast to the US (rising) and many European economies. However:
What is government redistribution?Show answer
Australia's tax-transfer system is among the most redistributive in the OECD:
What is 1. Employment status?Show answer
Employment is the single biggest determinant. Households where no adult is employed have far lower incomes than dual-earner households.
What is 2. Hours worked?Show answer
The rise of part-time and casual employment, especially among women, contributes to household-level inequality.
What is 3. Education and skills?Show answer
University graduates earn around 70 percent more over their working lives than those with year 12 only (Grattan Institute).
What is 4. Occupation and industry?Show answer
Finance, mining and ICT pay well above the average; retail, hospitality and personal care pay below.
What is 5. Capital and asset returns?Show answer
Capital gains from housing and equities accrue disproportionately to those who already own assets.
What is 6. Geography?Show answer
Sydney and Melbourne earnings are 15 to 20 percent above the national average; remote and regional areas earn below.
What is 7. Demographic factors?Show answer
Indigenous Australians, recent migrants and people with disability have substantially lower median incomes.