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An Ever-Rising Tide? Poverty in Australia in the Eighties

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  • Peter Saunders
  • George Matheson

Abstract

As in many other countries, the eighties have seen the re-emergence of poverty as a political issue in Australia. Rising unemployment and the increased incidence of sole parenthood have put more children at risk of poverty, a development which has prompted increased policy concern. This paper presents estimates of the incidence and structure of poverty in Australia in 1981–82, 1985–86 and 1989–90, using the poverty standard developed by the Poverty Commission in the seventies. The estimates for 1989–90 are based on data generated from the 1986 Income Distribution Survey by a microsimulation model that allows for trends in demographic change, labour market participation and income during the second half of the eighties. The results indicate that the overall poverty rate has increased from 9.2 per cent in 1981–82 to 12.8 per cent in 1989–90. This is despite the fact that the incomes of many low income groups have increased in real terms, in many cases substantially. The reason for this apparent paradox is that the poverty standard is a relative one, and has thus itself been increased in line with average community incomes. One of the conclusions of the paper is that it may be necessary to reconsider the use of a relative poverty standard when assessing short-run trends in the extent of poverty.

Suggested Citation

  • Peter Saunders & George Matheson, 1991. "An Ever-Rising Tide? Poverty in Australia in the Eighties," The Economic and Labour Relations Review, , vol. 2(2), pages 143-171, December.
  • Handle: RePEc:sae:ecolab:v:2:y:1991:i:2:p:143-171
    DOI: 10.1177/103530469100200208
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    References listed on IDEAS

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    1. Bradbury, Bruce & Saunders, Peter, 1990. "How Reliable Are Estimates of Poverty in Australia? Some Sensitivity Tests for the Period 1981-82 to 1985-86," Australian Economic Papers, Wiley Blackwell, vol. 29(55), pages 154-181, December.
    2. Danziger, Sheldon & Haveman, Robert & Plotnick, Robert, 1981. "How Income Transfer Programs Affect Work, Savings, and the Income Distribution: A Critical Review," Journal of Economic Literature, American Economic Association, vol. 19(3), pages 975-1028, September.
    3. Garry Hobbes & Helen Stott & Peter Saunders, 1989. "Income Inequality in Australia and New Zealand: International Comparisons and Recent Trades," LIS Working papers 34, LIS Cross-National Data Center in Luxembourg.
    4. Meredith Edwards & Peter Whiteford, 1988. "The Development of Government Policies on Poverty and Income Distribution," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 21(3), pages 54-73, September.
    5. Bruce Bradbury & Jennifer Doyle & Peter Whiteford, 1990. "Trends in the Disposable Incomes of Australian Families, 1982-83 to 1989-90," Discussion Papers 0016, University of New South Wales, Social Policy Research Centre.
    6. Danziger, Sheldon & Gottschalk, Peter, 1986. "Do Rising Tides Lift All Boats? The Impact of Secular and Cyclical Changes on Poverty," American Economic Review, American Economic Association, vol. 76(2), pages 405-410, May.
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    Cited by:

    1. Peter Saunders, 1998. "Using Budget Standards to Assess the Well-Being of Families," Discussion Papers 0093, University of New South Wales, Social Policy Research Centre.
    2. David Johnson, 1996. "Poverty Lines and the Measurement of Poverty," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 29(1), pages 110-126, January.
    3. Bruce Bradbury, 1999. "Tax Theory and Targeting: A Survey," Discussion Papers 00100, University of New South Wales, Social Policy Research Centre.

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