Always egalitarian? Australian earnings inequality 1870–1910

Abstract

We document the origins of Australia's egalitarianism by quantifying both the level and trends of earnings inequality during 1870–1910 by constructing social tables for earnings, thus overcoming the constraints imposed by the lack of income, tax and wealth data. We find that earnings inequality was much lower in Australia than in the United States and the United Kingdom in 1870 and that there was no rise in Australian earnings inequality over the half century 1870–1910, but rather a fall. We argue that such findings are driven by a faster skill supply growth relative to demand.