In this paper we document rise in wage inequality in Australia over the last decade. A key driver of this inequality is unobservable or residual inequality. We decompose residual wage inequality into permanent and transitory components. The estimates of the permanent shock from the first...

This paper makes the case that the structure of payment systems is such that, in contrast to competition in normal markets, private incentives can encourage activities and pricing that do not necessarily improve social welfare. Furthermore, while there is usually a reasonable presumption that...