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Regional Earnings Inequality in Great Britain: A Decomposition Analysis

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  • Heather Dickey

Abstract

This paper investigates the degree of earnings inequality in Great Britain over the period 1975-96 using individual-based data. It finds that the contribution of within-group inequality to both earnings inequality cross-sectionally and to its trend over time is substantially more important than the contribution of between-group inequality. Thus, the primary source of increasing inequality in the overall earnings distribution is increasing inequality within regions and not differences in average earnings between regions. A decomposition of the Gini coefficient is also adopted to illustrate how regional convergence in average earnings has been accompanied by increasing overall earnings inequality in the UK. A partir des donnees aupres des particuliers, cet article cherche a examiner l'importance de l'inegalite des revenus regionaux en Grande-Bretagne de 1975 a 1996. Il en resulte que la contribution de l'inegalite a l'interieur du groupe a l'inegalite des revenus par echantillon et sur le temps s'avere nettement plus importante que ne l'est l'inegalite entre groupes. Ainsi, la source primordiale de la croissance de l'inegalite de la distribution globale des revenus est l'accroissement de l'inegalite intraregionale et non pas l'ecart des revenus moyens interregionaux. On se sert aussi du coefficient Gini desagrege afin de demontrer comment la convergence regionale des revenus moyens se fait conjointement avec une hausse globale de l'inegalite des revenus au Royaume-Uni. Dieser Aufsatz untersucht das Ausmass der Unterschiede von Einkommen in Grossbritannien im Zeitraum 1975-1996, wobei er sich auf Daten von individuellen Fallen stutzt. Der Befund zeigt, dass der Beitrag der Unterschiede innerhalb einer Gruppe sowohl im Querschnitt als auch zu ihrer langfristigen Tendenz zum Einkommensunterschied weitaus bedeutender ist als der Beitrag zu Unterschieden zwischen verschiedenen Gruppen. Die Hauptquelle zunehmender Unterschiede in der allgemeinen Einkommensverteilung ist daher die zunehmende Ungleichheit der Regionen, und nicht die Unterschiede in durchschnittlichen Einkommen zwischen einzelnen Regionen. Eine Zerlegung des Gini Koeffizienten wird auch dazu benutzt, aufzuzeigen, wie regionale Konvergenz bei durchschnittlichen Einkommen mit zunehmenden allgemeinen Einkommensunterschieden im UK einhergeht.

Suggested Citation

  • Heather Dickey, 2001. "Regional Earnings Inequality in Great Britain: A Decomposition Analysis," Regional Studies, Taylor & Francis Journals, vol. 35(7), pages 605-612.
  • Handle: RePEc:taf:regstd:v:35:y:2001:i:7:p:605-612
    DOI: 10.1080/00343400120075876
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    References listed on IDEAS

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    1. Shorrocks, A F, 1980. "The Class of Additively Decomposable Inequality Measures," Econometrica, Econometric Society, vol. 48(3), pages 613-625, April.
    2. Bell, David N F, 1995. "Earnings Inequality in Great Britain: Some Additional Evidence," Scottish Journal of Political Economy, Scottish Economic Society, vol. 42(3), pages 290-309, August.
    3. Lambert, Peter J & Aronson, J Richard, 1993. "Inequality Decomposition Analysis and the Gini Coefficient Revisited," Economic Journal, Royal Economic Society, vol. 103(420), pages 1221-1227, September.
    4. Cowell, Frank A & Jenkins, Stephen P, 1995. "How Much Inequality Can We Explain? A Methodology and an Application to the United States," Economic Journal, Royal Economic Society, vol. 105(429), pages 421-430, March.
    5. Mookherjee, Dilip & Shorrocks, Anthony F, 1982. "A Decomposition Analysis of the Trend in UK Income Inequality," Economic Journal, Royal Economic Society, vol. 92(368), pages 886-902, December.
    6. Pyatt, Graham, 1976. "On the Interpretation and Disaggregation of Gini Coefficients," Economic Journal, Royal Economic Society, vol. 86(342), pages 243-255, June.
    7. Tam, Mo-Yin S & Persky, Joseph, 1982. "Regional Convergence and National Inequality," The Review of Economics and Statistics, MIT Press, vol. 64(1), pages 161-165, February.
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    Cited by:

    1. Mihaela SIMIONESCU, 2014. "The economic convergence in European Union based on concentration and entropy approach," EuroEconomica, Danubius University of Galati, issue 1(33), pages 31-42, May.

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