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Accounting for changes in income inequality: decomposition analyses for Great Britain, 1968-2009

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  • Brewer, Mike
  • Wren-Lewis, Liam

Abstract

We analyse income inequality in Great Britain over the period 1968-2009 in order to understand why income inequality rose very rapidly over the period 1978-91 and then stopped rising. We find that earnings inequality has risen fairly steadily since 1978, but other factors that caused inequality to rise in 1978-91 have since reversed. Inequality in investment and pension income has fallen since 1991, as has inequality between those with and without employment. Furthermore, certain household types – notably the elderly and those with young children – which had relatively low incomes in 1978-91 have seen their incomes converge with others.

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  • 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.
    • Handle: RePEc:ese:iserwp:2012-17
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    Cited by:

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    2. Farrell, Niall, 2017. "What Factors Drive Inequalities in Carbon Tax Incidence? Decomposing Socioeconomic Inequalities in Carbon Tax Incidence in Ireland," Ecological Economics, Elsevier, vol. 142(C), pages 31-45.
    3. Anh Tuan Bui & Cuong Viet Nguyen & Thu Phuong Pham, 2017. "Poverty among ethnic minorities: the transition process, inequality and economic growth," Applied Economics, Taylor & Francis Journals, vol. 49(31), pages 3114-3128, July.
    4. H. Lehmann & M. G. Silvagni, 2013. "Is There Convergence of Russia’s Regions? Exploring the Empirical Evidence: 1995 – 2010," Working Papers wp901, Dipartimento Scienze Economiche, Universita' di Bologna.
    5. 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.
    6. Mumtaz, Haroon & Theophilopoulou, Angeliki, 2017. "The impact of monetary policy on inequality in the UK. An empirical analysis," European Economic Review, Elsevier, vol. 98(C), pages 410-423.
    7. John Hills & Alari Paulus & Holly Sutherland & Iva Tasseva, 2014. "A lost decade? Decomposing the effect of 2001-11 tax-benefit policy changes on the income distribution in EU countries," ImPRovE Working Papers 14/03, Herman Deleeck Centre for Social Policy, University of Antwerp.
    8. Lars Osberg, 2014. "The Big Picture on Inequality Trends?," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 60(2), pages 400-403, June.
    9. Salverda, Wiemer & Checchi, Daniele, 2014. "Labour-Market Institutions and the Dispersion of Wage Earnings," IZA Discussion Papers 8220, Institute of Labor Economics (IZA).
    10. Azam, Mehtabul & Bhatt, Vipul, 2016. "Spatial Income Inequality in India, 1993-2011: A District Level Decomposition," IZA Discussion Papers 9892, Institute of Labor Economics (IZA).
    11. Mumtaz, Haroon & Theophilopoulou, Angeliki, 2017. "The impact of monetary policy on inequality in the UK. An empirical analysis," European Economic Review, Elsevier, vol. 98(C), pages 410-423.
    12. Theophilopoulou, Angeliki, 2018. "The impact of macroeconomic uncertainty on inequality: An empirical study for the UK," MPRA Paper 90448, University Library of Munich, Germany.

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