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Abstract
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.