Disparities and Despair: Changes in Regional Income Distributions in New Zealand 1981-96

Among developed economies, New Zealand is one of the countries that experienced a large increase in personal income inequality since the mid 1980s.

This paper focuses on income inequality at the regional level. Smith (2000) and Karagedikli et al. (2000) found that the variation in mean income across regions also grew sharply, but that there was convergence among regions in measures of intra-regional income inequality. This paper further investigates changes in inter and intra-regional income dispersion.

Excluding the metropolitan regions Auckland and Wellington, real mean incomes converged across the regions (and declined for males). Regional Gini coefficients were higher in 1996 than in 1981 for males, but lower for females. However, women experienced a higher increase in inequality during the second half of the economic reform decade (1986-1996), while men experienced a higher increase during the first half.

Regional labour market characteristics play an important role in explaining the regional income distributions. We also focus on the interaction between income inequality and economic growth at the regional level.

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Citation

Karagedikli, Ozer; David C. Maré and Jacques Poot. 2001. "Disparities and Despair: Changes in Regional Income Distributions in New Zealand 1981-96", Australasian Journal of Regional Studies, 6:3, pp. 323-47.