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Wealth inequality

Summary:
I go through some of the complications in trying to weigh up wealth and inequality in this week's column over at Newsroom ($).A few fun (and perhaps surprising) facts:Government provision of some services can increase measured wealth inequality even if they result in no change whatsoever to anyone's lived experience. Converting each Kiwi's NZ Super entitlement into a private account would reduce measured wealth inequality by giving everyone a lump-sum. Converting each Kiwi's health system entitlement into a lump sum transfer into a medical savings account (with government top-up for big events) would have similar effect.  Stats NZ's data shows median wealth increased from 2015 to 2018. Credit Suisse data has half of all adults in the global top 10% for wealth - and showed a drop in NZ's

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I go through some of the complications in trying to weigh up wealth and inequality in this week's column over at Newsroom ($).

A few fun (and perhaps surprising) facts:

  • Government provision of some services can increase measured wealth inequality even if they result in no change whatsoever to anyone's lived experience. Converting each Kiwi's NZ Super entitlement into a private account would reduce measured wealth inequality by giving everyone a lump-sum. Converting each Kiwi's health system entitlement into a lump sum transfer into a medical savings account (with government top-up for big events) would have similar effect. 
  • Stats NZ's data shows median wealth increased from 2015 to 2018.
  • Credit Suisse data has half of all adults in the global top 10% for wealth - and showed a drop in NZ's wealth Gini coefficient from 2015 to 2018. 
  • On the Credit Suisse Gini, NZ sits midway between France and Canada; on the OECD's measure of the share of wealth held by the top 10%, we're below Denmark, the Netherlands and the US, roughly on par with Canada, France, the UK, Ireland and Austria, and more concentrated than Japan and Italy. We're also more concentrated than Australia - but remember that Oz has greater reliance on private retirement accounts.

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