Inequality in Australia is at its worst since 1950, according to a new report. 

Australia's high economic inequality has been linked to key factors including age, education, employment status, gender, disability, geographic location, and place of birth, according to a research paper by the Actuaries Institute. 

The report shows that 40 per cent of Australia’s historic economic inequality is driven by these factors. 

The research also suggests that addressing retirement equity issues, expanding age-pension eligibility, and increasing rental assistance are some of the ways that the government can better redistribute the dividends of economic growth. 

The report's authors, Hugh Miller and Laura Dixie from actuarial firm Taylor Fry, used the Gini methodology to calculate Australia’s Gini coefficient for individuals, which they found to be 0.46, indicating high inequality. 

The research highlights that inequality levels have reached the same levels as they were in 1950, in the aftermath of World War II. 

Furthermore, the study found that wealth inequality is much larger than income inequality, with the top 20 per cent of households having six times the income of the lowest quintile and 230 times the net assets. 

The authors warn that this wealth gap has resulted in poorer social outcomes for low-income households, with inequality also driving geographical stratification within cities.

The report indicates that a disconnect between economic and wages growth is a significant driver of income and wealth inequality. 

The share of gross domestic product attributed to company profits has nearly doubled since the 1970s, while wages have fallen by 10 percentage points to around 50 per cent of GDP in the same period. 

The authors suggest that increasing casualisation and gig work is contributing to this trend. 

The study also reveals that high levels of inequality have significant consequences economically and socially. 

Lower consumption growth leads to lower business investment, and inequality reduces the effectiveness of monetary policy. Economic inequality, particularly lower incomes at the bottom of the distribution, dampens consumption, human capital development, and growth. 

The research shows that age is the biggest driver of inequality, with incomes tending to grow as people advance in their careers. 

Tertiary qualifications can lift personal incomes by up to $20,000, while gender pay gaps reduce income by $16,000. Geographic location and country of birth can also reduce individual incomes by $13,000 on average. 

The authors warn that these enduring disadvantages are leading to large differences in social outcomes, including poverty levels, housing affordability, and life expectancy.