Things we didn’t know before the latest set of Treasury working papers came out:
- Income mobility in NZ is high: From one year to the next, over 60% of the population shifts income decile group; only 22% stay in the same income decile group eight years later. Remember that when looking at numbers for the bottom 10% or bottom 20%: this largely isn’t persistent poverty.
- Most people talking about inequality don’t have a clue what they’re talking about. Every one of the different statistical measures of inequality has an underlying set of background value judgements. Creedy and Eedrah draw the links. Creedy explains further here.
- Workers in foreign-owned firms earn 2 – 4% more than Kiwis employed in NZ-owned firms, after correcting for that foreign firms tend to be larger. But I doubt it’ll matter for those who want to ban foreign investment in New Zealand.
- Working For Families, by increasing the effective marginal tax rate for second-earners, reduced married women’s labour force participation rates and hours worked. But it also reduced inequality and poverty.
- If you increase the age of eligibility for public pensions, people save more. If Key announced today that the retirement age were to go up in 2025, we’d see saving rates increase now in anticipation of it.