Earnings Inequality in Australia: Changes and Causes

This paper reviews research which has examined recent developments in earnings inequality in Australia. Three main issues are addressed. First, what have been the dimension and timing of changes in earnings inequality which have occurred? Second, how have earnings differentials between workers in different age groups and with different levels of educational attainment changed, and to what extent can those changes be explained by shifts in the relative demand for labour and relative supply of labour by level of skill? Third, what do we know about the causes of changes in earnings inequality?