Read The Times Australia

Daily Bulletin

The inequality you can't change that lasts a lifetime

  • Written by: Tina Rampino, Research Fellow Institute for Social Science Research, The University of Queensland

If you’re a healthy white man, live in the city and come from a wealthy family chances are you’ll be better off than someone with a different ethnicity, gender, or location. We found it’s factors like these that explain at least 8% of income inequality in Australia.

The real percentage might even be a lot higher as our research didn’t include important factors such as health and disability or any other circumstances that exist but cannot be measured. So this inequality is really based on circumstances beyond a person’s control.

This type of inequality is half due your parents’ occupation - having a father with a prestigious job is the biggest of these factors, but your mother’s profession also has a positive impact on where you stand. The next most important factors are country of birth and gender, which together account for a further 15%.

But our research shows that government payments are effective in reducing some of the inequality these factors create. Income support and family payments, among others, reduce this type of inequality by 30% before taxes and an extra 29% after taxes. But research also shows that programs targeted at specific points (such as preschool programs in childhood) can also reduce inequality associated with factors outside of people’s control.

Read more: Why it’s so hard to say whether inequality is going up or down

Inequality and social mobility

In a recent paper we showed that income inequality has grown globally in the last 30 years. In Australia alone, income inequality after tax has grown (as measured by the Gini coefficient) from 0.27 in 1980 to 0.33 in 2012. The Gini coefficient is a common way of measuring how unequal a society is. It ranges from 0 (if everybody earned exactly the same amount) to 1 (if all of the country’s income was earned by a single person).

In another paper colleagues used data from the Household Income and Labour Dynamics Survey to estimate how strongly a son’s earnings are related to his father’s. This not only measured inequality, but also social mobility - the ability of children to move up or down a social class.

We found that a 1% increase in a father’s earnings is associated with about a 0.25% increase in the son’s earnings. Using a different method, another recent paper estimated the increase to the son’s earnings to be about 0.35% from a 1% increase in a father’s earnings. By this measure we found that Australians are less socially mobile than people in most Scandinavian countries, Germany and New Zealand.

How to fight this type of inequality

Distinguishing the inequality that arises from circumstances (such as country of birth, gender, family background etc.), luck (which is also out of a person’s control) and from effort (over which people do have some control) is difficult. But research now clearly shows that from an early age, differences in circumstances and luck matter.

There is now a global effort to produce accurate, internationally comparable measures of the inequality of opportunity. But regardless of the exact numbers, a substantial body of research provides ideas on how to prevent and tackle it.

These include programs aimed at early childhood, with intensive preschool programs shown to have long-term positive impact on school achievement and even job performance. One preschool program in the United States was found to significantly increase earnings in adulthood and even the probability of owning a home.

Another US program was aimed at parents - helping them find employment and apply for government services. This program also had a positive impact on the children’s future education, earnings and home ownership.

What all of this shows is that early interventions (early in people’s lives, and early in the occurrence of potential major life problems), plus ongoing support, can reduce some of the inequality of opportunities.

That’s especially if they are targeted at the critical points (such as childhood), where people’s opportunities can be particularly constrained by their background and other circumstances out of their control.

This article included contributions by Arturo Martinez Jr. from the Economics Research and Regional Cooperation Department, Asian Development Bank.

Authors: Tina Rampino, Research Fellow Institute for Social Science Research, The University of Queensland

Read more http://theconversation.com/the-inequality-you-cant-change-that-lasts-a-lifetime-82153

Business News

Designing Eco-Friendly Custom Water Bottles for Your Next Event

The Evolution of Sustainable Event Merchandise Event planning has undergone a massive transformation over the last decade. Gone are the days when organizers could hand out cheap, single use plastic...

Daily Bulletin - avatar Daily Bulletin

Why Choosing a Professional Florist Melbourne Makes Flower Delivery Impactful

Flowers have a great power to speak when humans cannot express their feelings with right words. Flowers are the best gifts when you are celebrating a birthday or welcoming a newborn child into your fa...

Daily Bulletin - avatar Daily Bulletin

The Business Case for Choosing Australian Fabricators Over Imported Alternatives

For a long time, you might have defaulted to overseas suppliers when sourcing fabricated metal components for a project. The unit price was lower on paper, and the maths seemed straightforward. That...

Daily Bulletin - avatar Daily Bulletin

Australian organisations are relying on business continuity plans built for a far more predictable world

Tariff escalations, supply chain fragility, geopolitical events, and the ongoing threat of cyber disruption have reshaped the risk environment facing Australian organisations. The problem is that ma...

Daily Bulletin - avatar Daily Bulletin

How to Rent a Car for Uber in Melbourne: What Every New Driver Needs to Know

Starting out as an Uber driver in Melbourne is not as complicated as it sounds but getting the vehicle right is where most new drivers get stuck. Uber has strict requirements around vehicle age, condi...

Daily Bulletin - avatar Daily Bulletin

When Should You Speak to a Lawyer About a Legal Issue?

Legal issues can begin with a simple question, then become harder to manage once formal steps are involved. Many people wait until a matter feels urgent before seeking guidance, even though earlier ...

Daily Bulletin - avatar Daily Bulletin

The strategic rise of Bali as Australia’s next essential healthcare support hub

As Australian healthcare providers grapple with unprecedented operational bottlenecks, a new nearshore model is quietly transforming patient care delivery. Forward-thinking organisations,  including...

Daily Bulletin - avatar Daily Bulletin

Cost Savings and Benefits of Using Used Pallets in Logistics

In today’s competitive logistics and supply chain industry, businesses are constantly looking for ways to reduce operational costs without compromising efficiency and reliability. One of the most prac...

Daily Bulletin - avatar Daily Bulletin

How Fulfilment Services in Australia Help Businesses Scale Efficiently

The growth of e-commerce and modern retail has transformed customer expectations. Consumers now expect fast shipping, accurate order processing, and seamless delivery experiences regardless of where...

Daily Bulletin - avatar Daily Bulletin

The Daily Magazine

Why Businesses Are Choosing Virtual Reception Services

In today’s fast-paced digital world, businesses are constantly evolving to meet the needs of their...

Why Concrete Pools Offer Endless Design Possibilities

Imagine stepping into your backyard and being greeted by a stunning pool that reflects your person...

How Legal Advice Can Help with Driving Offences

Driving is a part of everyday life for many people. It allows us the freedom to travel, commute, a...

How Experienced Lawyers Support Criminal Defence

Facing criminal charges can be one of the most daunting experiences in a person's life. The stakes...

How media and Digital Marketing agencies Help Brands Stand Out

In today’s hyper-connected world, standing out is more challenging than ever. Brands are competing...

How to Choose the Perfect Honeymoon Destination

Your wedding day is just the beginning of an incredible journey together. After saying "I do," it’...

Walking Shoes vs Running Shoes: Which Are Better for Daily Walking?

Running shoes have become the default athletic footwear for a lot of people who rarely run. That ...

What Happens to Your Rubbish After It Leaves the Kerb

Most of us don’t think much about rubbish once the bin lid closes. The truck arrives, the bins are e...

Thermoplastic vs. Paint: The True Long-Term Cost Comparison

Line marking looks like a simple line item on a school maintenance budget, until the true cost of ...