Income Mobility in New Zealand: A Descriptive Analysis (WP 14/15)

Abstract

The purpose of this paper is to examine the absolute and relative income mobility in disposable income in New Zealand using the full longitudinal data from the Survey of Family, Income and Employment (SoFIE) from 2002 to 2010. To summarise the patterns of mobility, we analyse the income changes over the short-term (annual) and a longer term interval (eight years). There is change in incomes between one year and the next, with over 60 percent of the population changing income decile group. The movements in income group are more of a short distance (to adjacent income groups) than long distance. There is substantial change in income over the long-run in both absolute and relative income. Only 22 percent stay in the same income decile group eight years later. The findings of mobility income are similar to those found in other international longitudinal surveys.

Acknowledgements

We would like to thank John Creedy, Tony Burton, Margaret Galt, Gerald Minnee and the referees for their helpful comments on the paper.

Disclaimer

The views, opinions, findings, and conclusions or recommendations expressed in this Working Paper are strictly those of the author(s). They do not necessarily reflect the views of the New Zealand Treasury or the New Zealand Government.  The New Zealand Treasury and the New Zealand Government take no responsibility for any errors or omissions in, or for the correctness of, the information contained in these working papers. The paper is presented not as policy, but with a view to inform and stimulate wider debate.

Statistics New Zealand Security Statement

Access to the data used in this study was provided by Statistics New Zealand in a secure environment designed to give effect to the confidentiality provisions of the Statistics Act, 1975. The results in this study and any errors contained therein are those of the authors, not Statistics New Zealand.