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Keywords:

  • equity;
  • Gini coefficient;
  • Kuznets curve;
  • regional development;
  • resource curse

Mining activity has been a significant driver of export growth as well as income and employment in parts of regional Australia. However, while income growth is an economic benefit, the high incomes associated with the mining sector may also lead to greater inequality. This paper describes an empirical analysis of mining activity and income inequality in regional Australia. The Gini coefficient (a measure of inequality) for personal income is found to be significantly associated with levels of mining employment. However, this relationship is not linear. Rather, income inequality initially increases with mining activity, before decreasing at medium to high levels of mining employment, following a Kuznets curve pattern. Segregating data for men and women reveals very different patterns. Among men, inequality initially increases as mining employment in a region increases, but then sharply decreases; at high levels of mining activity, income inequality among men is lower than is typically observed in non-mining areas. Among women, income inequality increases with mining activity throughout its range. This suggests that income inequality is most likely to be a problem in locales with intermediate levels of mining activity and that it affects men and women quite differently.