A new look at the distribution and determinants of income in Australia: Evidence from linked tax, social security and Census data

Recently, the Australian Bureau of Statistics has been leading the Multi-Agency Data Integration Project (MADIP). This project involves linking of data from the Census to administrative data from three sources - an individual tax payer database, an income support database, and a government-funded health services database.

This unique database has only just been made available (in a deidentified format) to external academic researchers. This paper provides a first external analysis of the linked dataset, with the following substantive and methodological focuses:

•    The background to MADIP and the four component datasets (the Census, and the three administrative datasets);
•    The linkage process and the quality of the linked data;
•    What can the data tell us about the distribution of income in Australia, taking into account taxable income and income-support status; 
•    Mobility across the income distribution, and how that relates to demographic and geographic characteristics;
•    Whether there are differences by race and ethnicity in taxable income, controlling for observable human capital characteristics; and
•    The implications for linkage of large survey datasets to administrative databases, including the policy recommendations that might result.