Income Inequality in Small Regions: A Study of Australian Statistical Divisions

With the exceptions of the early studies by Kuznets (1963) and Williamson (1965), there has been little empirical analysis of the nature of the relationship between economic development of regions and income inequality in countries outside the U.S. This paper offers such an analysis for Australian sub-state regions. It does so in the context of considering the validity of the “augmented inverted U” hypothesis and the influence of factors such as the business cycle, political issues, and demographic trends, which are likely to cause income inequality to change over time.