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GINI Country Report: Growing Inequalities and their Impacts in the United Kingdom

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  • Abigail Mcknight

    ()
    (London School of Economics, Centre for Analysis of Social Exclusion)

  • T. Tsang
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    Abstract

    Over the 1980s inequality in the UK increased dramatically. Since the 1990s there have been periods of falling inequality and periods of rising inequality but nothing that matches the change in inequality that occurred in the 1980s. Not only did the increase in inequality in the 1980s lead to a high level of inequality from a UK perspective but the UK became one of the most unequal advanced nation and this has remained the case. Increases in household income inequality were driven by increases in labour market inequalities – earnings and labour force participation – affecting both individual and household inequalities. This is not surprising as the vast majority of household original (market) income is derived from employment income. What has driven these increases in labour market inequality? While there is no consensus, it is generally agreed that globalisation, skill-biased (task-biased) technological change and institutional change all contributed to this increase. Changes to the supply of skills (particularly educational attainment) relative to changes in demand for these skills either exacerbated or ameliorated these pressures. Demographic change also played a part with increases in single-headed households and the extent to which individuals formed households with similarly qualified adults (homogamy).

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    Bibliographic Info

    Paper provided by AIAS, Amsterdam Institute for Advanced Labour Studies in its series GINI Country Reports with number united_kingdom.

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    Date of creation: Jul 2013
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    Handle: RePEc:aia:ginicr:united_kingdom

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    1. Paul Gregg & Susan Harkness & Stephen Machin, 1999. "Poor kids: trends in child poverty in Britain, 1968-96," Fiscal Studies, Institute for Fiscal Studies, vol. 20(2), pages 163-187, June.
    2. Richard Blundell & Ian Preston, 1997. "Consumption, inequality and income uncertainty," IFS Working Papers W97/15, Institute for Fiscal Studies.
    3. Mike Brewer & James Browne & Andrew Hood & Robert Joyce & Luke Sibieta, 2013. "The Short‐ and Medium‐Term Impacts of the Recession on the UK Income Distribution," Fiscal Studies, Institute for Fiscal Studies, vol. 34(2), pages 179-201, 06.
    4. Amanda Gosling & Thomas Lemieux, 2004. "Labor Market Reforms and Changes in Wage Inequality in the United Kingdom and the United States," NBER Chapters, in: Seeking a Premier Economy: The Economic Effects of British Economic Reforms, 1980-2000, pages 275-312 National Bureau of Economic Research, Inc.
    5. Mark B. Stewart, 2011. "The Changing Picture of Earnings Inequality in Britain and the Role of Regional and Sectoral Differences," National Institute Economic Review, National Institute of Economic and Social Research, vol. 218(1), pages R20-R32, October.
    6. Francis Jones & Daniel Annan & Saef Shah, 2008. "The distribution of household income 1977 to 2006/07," Economic and Labour Market Review, Palgrave Macmillan, vol. 2(10), pages 18-31, December.
    7. A. B. Atkinson, 2005. "Top incomes in the UK over the 20th century," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 168(2), pages 325-343.
    8. Stuart Adam & James Browne, 2010. "Redistribution, work incentives and thirty years of UK tax and benefit reform," IFS Working Papers W10/24, Institute for Fiscal Studies.
    9. Atkinson, Anthony B. & Leigh, Andrew, 2010. "The Distribution of Top Incomes in Five Anglo-Saxon Countries over the Twentieth Century," IZA Discussion Papers 4937, Institute for the Study of Labor (IZA).
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