Assessing income adequacy in New Zealand

Abstract

This paper briefly describes some of the work done in 1990 to empirically assess income adequacy in New Zealand for 1988/89. Seven different income standards were generated using three approaches. These methods, the food share, relative income, and relative earnings, are briefly described. Despite using different approaches, the standards tend to be around $12,500 and $15,000 pa for a household of four. In addition, three measures of household income and wealth are developed. For each standard the head‐count and income‐gap were determined. While the percentage of those falling below the standards tended to be low, the frequency of falling below the standard was higher for households that receive cash benefits, such as unemployment or National Superannuation, than those that did not. Similarly, larger households were more likely to fall below the standards. Finally, households with self employment income or who did not receive benefits or National Superannuation or work for the full year were more likely to fail the standards.

Notes

United States Department of the Treasury, Washington.