Earnings inequality in Singapore

Abstract

Based on the data on earnings distributions from the national labour force surveys of 1974-98, trends in income inequality are studied. Of particular note are the findings from the Paglin Gini and Theil decompositions. The former show that behind an invariant overall Gini ratio lies a declining inter-age disparity and growing P-Gini. From the latter, it is found that inter-age and inter-educational disparities have respectively contributed some 12 per cent and 34 per cent to overall inequality. It is found that inter-occupational inequality, as measured by the Theil index, almost doubled in the period. This is in sharp contrast to trends in inter-educational activity, thus illustrating that the education-occupation linkage is not clear-cut.