Real per capita household disposable income is considered the most reliable indicator of individual living standards.
According to OECD data, Australia recorded the slowest increase in real per capita household disposable income among major English-speaking countries over the decade ending in the March quarter of 2025.
Australia’s real per capita household disposable income increased by only 3.5% over the decade to the first quarter of 2025, compared to 8.9% in Canada, 20.6% in the United States, and 8.0% in the United Kingdom.
Australia’s 3.5% increase in real per capita household disposable income was considerably behind the OECD average of 18.7% for the decade.
One of the problems with deflating real household disposable income by the population to gain the per capita value is that it doesn’t adjust for the change in demographics, namely the increase in the share of adults in the economy.
Like other developed nations, Australia’s fertility rate has collapsed and household sizes have shrunk.
To adjust for these changes, I have deflated Australia’s household disposable income by the civilian population aged 15 and over to serve as a proxy for household disposable income per adult.
As illustrated above, Australia’s real household disposable income per adult has increased by 40% this century, significantly below the 47% rise in real household disposable income per capita.
However, the bulk of this rise in incomes occurred in the first decade of this century. Over the past 15 years, real household disposable income per adult increased by only 8.6%, significantly below the 11.0% rise in real household disposable income per capita.
Worse, over the decade to the second quarter of 2025, real household disposable income per adult increased by only 0.6%, well below the 2.6% rise in real household disposable income per capita.
To be fair, birth rates have collapsed across the OECD, as illustrated below.
As a result, household disposable incomes per adult would have lagged per capita incomes across the advanced world, not just Australia.
