Microeconomic Reform and Income Distribution: The case of Australian Ports and Rail Freight Industries

We analyse structural changes in the Australian ports and rail freight industries during 1990s that were driven by microeconomic reform. We estimate the direct and indirect effects on household income groups of these industry changes by applying a computable general equilibrium model incorporating detailed household income and expenditure accounts, and microsimulation behaviour. The model contains both top-down and bottom-up linkages. The structural changes lead to a small increase in household welfare in most regions, with an overall increase of 0.18%. Income inequality is estimated to have decreased slightly by 0.02%.