4 Population ageing, inequality and poverty
This section presents a range of income inequality and poverty measures to demonstrate the effect on the income distribution of a changing population structure and labour force participation rates. First, it is useful to consider how the income distribution is expected to change as a consequence of calibrating the 2009/10 survey (as described in Appendix B) to reflect the projected demographic structure of future years.
Figure 5 shows how the proportions of different types of family are expected to change between 2010 and 2060. As expected, families receiving NZS show the largest increase as a share of family types. The other family categories included in the graph are non-NZS recipient families. It is expected that sole parent families will represent broadly similar proportions, while couples, with and without children, are expected to decrease as a proportion of the total number of families.
- Figure 5 - Proportion of Family Types: 2010 and 2060
- Figure 6 - Median Individual Market Income by Age: 2010
Figure 6 shows median individual market income by age for 2010, where the distributions include zeros for those with no market income. Clearly the zeros dominate for those in the age groups below 19 and above 65 years.
Figure 7 shows the proportion of individuals aged 65 and over in each disposable income decile. The deciles were computed using total household disposable income per adult equivalent person, with the household as the unit of analysis. Hence, while exactly 10 per cent of households are in each decile, the proportion of individuals in each decile varies somewhat.[15] Those over 65 years form a relatively high proportion of individuals in the lower-income deciles. However, there is a wide dispersion of incomes in the older age groups. For instance, in Figure 7 the largest proportion of individuals aged 65 are in decile 3 in 2010, but by 2060 the largest proportion are in decile 2. Nevertheless, older individuals are expected to become better represented in upper-income deciles. These trends reflect two types of change. First, those who work past the age of 64 will earn relatively high market incomes and will also receive NZS. Those who do not participate in the labour market, or can only do so at much lower levels after the age of 64, rely on NZS as their main income source and move to the lower income deciles, often using the benefit system to transition to retirement.
- Figure 7 - Proportion of Individuals Aged 65 and Over in each Income Decile
Notes
- [15]The proportion varies between 9 and 11 per cent.
