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
Tina Rampino and Mark Western – The Conversation – 15 Aug 2017