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Why did Britain’s households get richer? Decomposing UK household income growth between 1968 and 2008–09

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  • Brewer, Mike
  • Wren-Lewis, Liam

Abstract

Average real UK household income has almost doubled over the past forty years. With four decades of micro-data on household incomes, and relatively simple decomposition methods, we document the contribution to this growth in the mean net household income of working-age households from different income sources, and break down further changes in employment income by household member and into separate participation, hours and hourly wage effects. We also perform such analyses for the mean income of the richest working-age households, and among a group defined by having a low household income but a strong connection to the labour market.

Suggested Citation

  • Brewer, Mike & Wren-Lewis, Liam, 2012. "Why did Britain’s households get richer? Decomposing UK household income growth between 1968 and 2008–09," ISER Working Paper Series 2012-08, Institute for Social and Economic Research.
    • Handle: RePEc:ese:iserwp:2012-08
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    File URL: https://www.iser.essex.ac.uk/wp-content/uploads/files/working-papers/iser/2012-08.pdf
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    1. Paul Gregg & Jonathan Wadsworth, 2008. "Two sides to every story: measuring polarization and inequality in the distribution of work," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 171(4), pages 857-875, October.
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    1. Brewer, Mike & Wren-Lewis, Liam, 2012. "Accounting for changes in income inequality: decomposition analyses for Great Britain, 1968-2009," ISER Working Paper Series 2012-17, Institute for Social and Economic Research.
    2. Mike Brewer & Liam Wren-Lewis, 2016. "Accounting for Changes in Income Inequality: Decomposition Analyses for the UK, 1978–2008," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 78(3), pages 289-322, June.
    3. Ernest Aigner & Lucia Baratech Sanchez & Desiree Alicia Bernhardt & Benjamin Curnow & Christian Hödl & Heidi Leonhardt & Anran Luo, 2016. "Sustainable Work. WWWforEurope Working Paper No. 112," WIFO Studies, WIFO, number 58685, April.
    4. Salverda, Wiemer & Checchi, Daniele, 2014. "Labour-Market Institutions and the Dispersion of Wage Earnings," IZA Discussion Papers 8220, Institute of Labor Economics (IZA).

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