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Mind the Gaps: the Evolution of Regional Inequalities in the UK, 1982-1997

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  • Gilles Duranton
  • V Monastiriotis

Abstract

In this paper we apply earnings equations for UK regions over 1982-1997. We find strong evidence of rapid convergence across regions regarding the determinants of individual wages (ie regional fixed-effects, gender gaps and returns to education and experience). Data on average regional earnings, by contrast, point at a worsening of UK regional inequalities and a rise in the North-South gap. Education accounts for most of the discrepancy between aggregate divergence and disaggregated convergence. First, London gained because its workforce became relatively more educated over the period. Second, returns to education increased nation-wide, which favoured the most educated regions (ie London). Third, returns to education were initially lower in London but they (partially) caught up with the rest of the country. Had returns to education and their distribution across UK regions remained stable over the period, the UK North-South divide would have decreased.

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Bibliographic Info

Paper provided by Centre for Economic Performance, LSE in its series CEP Discussion Papers with number dp0485.

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Date of creation: Dec 2000
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Handle: RePEc:cep:cepdps:dp0485

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Web page: http://cep.lse.ac.uk/_new/publications/series.asp?prog=CEP

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Keywords: Wage equation; regional inequalities;

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References

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  1. Stephen Nickell & Tracy Jones & Glenda Quintini, 2000. "A picture of job insecurity facing British men," LSE Research Online Documents on Economics 20141, London School of Economics and Political Science, LSE Library.
  2. Simon Burgess & H Turon, 2000. "Unemployment Dynamics, Duration and Equilibrium: Evidence from Britain," CEP Discussion Papers dp0474, Centre for Economic Performance, LSE.
  3. Rodriguez-Pose, Andres, 1998. "Dynamics of Regional Growth in Europe: Social and Political Factors," OUP Catalogue, Oxford University Press, number 9780198233831, September.
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Cited by:
  1. Vieira, José A. Cabral & Couto, João Pedro Almeida & Borges Tiago, Maria Teresa, 2005. "Inter-Regional Wage Dispersion in Portugal," IZA Discussion Papers 1664, Institute for the Study of Labor (IZA).
  2. Laurent Gobillon & Carine Milcent, 2013. "Spatial disparities in hospital performance," Journal of Economic Geography, Oxford University Press, vol. 13(6), pages 1013-1040, November.
  3. repec:hal:wpaper:halshs-00586837 is not listed on IDEAS
  4. Rice, P., 2002. "The great divide: regional differences in education and training," Discussion Paper Series In Economics And Econometrics 0201, Economics Division, School of Social Sciences, University of Southampton.
  5. Lubomira Anastassova, 2006. "Productivity Differences and Agglomeration Across Districts of Great Britain," CERGE-EI Working Papers wp289, The Center for Economic Research and Graduate Education - Economic Institute, Prague.

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