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Regional Earnings Inequality in Great Britain: Evidence from Fixed‐effects Regressions

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  • Heather Dickey

Abstract

. Earnings inequality in Great Britain has increased substantially over the last two decades at both the national and regional levels. This paper examines the determinants of regional hourly earnings over the period 1976–95 by estimating regional fixed‐effects earnings equations. Using panel data from the New Earnings Survey, individual‐specific heterogeneity is controlled for, and superior estimates of the factors affecting regional earnings are obtained. Increasing returns to skill, increasing industrial differentials, and increasing premiums for older workers are found to have contributed to increasing regional earnings inequality, and consequently rising earnings inequality at the national level.

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  • Heather Dickey, 2007. "Regional Earnings Inequality in Great Britain: Evidence from Fixed‐effects Regressions," LABOUR, CEIS, vol. 21(4‐5), pages 763-787, December.
    • Handle: RePEc:bla:labour:v:21:y:2007:i:4-5:p:763-787
    DOI: 10.1111/j.1467-9914.2007.00391.x
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    1. David Bell & Felix Ritchie, "undated". "Female Earnings and Gender Differentials in Great Britain 1977-1990," Working Papers Series 96/9, University of Stirling, Division of Economics.
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    Cited by:

    1. Bruckmeier, Kerstin & Schwengler, Barbara, 2009. "The impact of federal social policies on spatial income inequalities in Germany : empirical evidence from social security data," IAB-Discussion Paper 200901, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    2. Andrés Rodríguez‐Pose & Vassilis Tselios, 2009. "Education And Income Inequality In The Regions Of The European Union," Journal of Regional Science, Wiley Blackwell, vol. 49(3), pages 411-437, August.
    3. McMillen, Daniel P., 2008. "Changes in the distribution of house prices over time: Structural characteristics, neighborhood, or coefficients?," Journal of Urban Economics, Elsevier, vol. 64(3), pages 573-589, November.
    4. Gibbons, Stephen & Overman, Henry G. & Pelkonen, Panu, 2010. "Wage disparities in Britain: people or place?," LSE Research Online Documents on Economics 30845, London School of Economics and Political Science, LSE Library.
    5. Neil Lee & Paul Sissons & Katy Jones, 2016. "The Geography of Wage Inequality in British Cities," Regional Studies, Taylor & Francis Journals, vol. 50(10), pages 1714-1727, October.
    6. Inés P. Murillo Huertas & Raúl Ramos & Hipólito Simón, 2020. "Revisiting interregional wage differentials: New evidence from Spain with matched employer‐employee data," Journal of Regional Science, Wiley Blackwell, vol. 60(2), pages 296-347, March.
    7. Neil Lee & Andrés Rodríguez-Pose, 2013. "Innovation and spatial inequality in Europe and USA," Journal of Economic Geography, Oxford University Press, vol. 13(1), pages 1-22, January.
    8. Aurora Galego & João Pereira, 2014. "Decomposition of Regional Wage Differences Along the Wage Distribution in Portugal: The Importance of Covariates," Environment and Planning A, , vol. 46(10), pages 2514-2532, October.
    9. Heather Dickey & Alessa M. Widmaier, 2021. "The persistent pay gap between Easterners and Westerners in Germany: A quarter‐century after reunification," Papers in Regional Science, Wiley Blackwell, vol. 100(3), pages 605-631, June.
    10. Joao Pereira & Aurora Galego, 2013. "Intra-Regional Regional Wage Inequality In Portugal: A Quantile Based Decomposition Analisys," ERSA conference papers ersa13p158, European Regional Science Association.
    11. Patricia C. Melo, 2017. "People, places and earnings differentials in Scotland," Regional Studies, Taylor & Francis Journals, vol. 51(3), pages 389-403, March.

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