ABSTRACT
This chapter provides a description of the trends in income inequality in Singapore over the period 1984 to 2011. Due to high wage costs and competition from developing countries, in the 1980s Singapore lost its comparative advantage in labour-intensive industries. The high wages that the expatriate professionals received, coupled with low wages paid to unskilled foreign workers underlie the very high income inequality in Singapore. Throughout the 1997-98 crisis period, inequality decreased despite an increase in unemployment. Increase in inequality in the 2000s is a global phenomenon and Singapore is no exception. The reduction in the contribution of within-occupational inequality is due to a reduction in individual group inequality for professionals and service people. Immigration policy is not governed by income inequality considerations. The need to preserve international competitiveness may well mean that workers from both the upper and lower ends of the income scale will be attracted to Singapore.
