IDEAS home Printed from https://ideas.repec.org/p/ese/iserwp/2016-03.html
   My bibliography  Save this paper

What has been happening to UK income inequality since the mid-1990s? Answers from reconciled and combined household survey and tax return data

Author

Listed:
  • Burkhauser, Richard V.
  • Hérault, Nicolas
  • Jenkins, Stephen P.
  • Wilkins, Roger

Abstract

Estimates of UK income inequality trends differ substantially according to whether estimates are based on household survey data (used for official statistics) or tax return data (used in the top incomes literature). We reconcile differences in variable definitions and combine survey and tax return data in order to take advantage of the much better coverage of top incomes in the latter, and provide improved estimates of UK inequality trends since the mid-1990s. We show there was a marked increase in income inequality in the early 2000s that survey-based estimates do not reveal, and our conclusions are robust to changes in the definitions of income, income-sharing unit, and summary inequality measure. In addition, our reconciled and combined data provide more comparable estimates of UK-US inequality trends than the top incomes literature to date.

Suggested Citation

  • Burkhauser, Richard V. & Hérault, Nicolas & Jenkins, Stephen P. & Wilkins, Roger, 2016. "What has been happening to UK income inequality since the mid-1990s? Answers from reconciled and combined household survey and tax return data," ISER Working Paper Series 2016-03, Institute for Social and Economic Research.
    • Handle: RePEc:ese:iserwp:2016-03
    as

    Download full text from publisher

    File URL: https://www.iser.essex.ac.uk/research/publications/working-papers/iser/2016-03.pdf
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Anthony B. Atkinson & Thomas Piketty & Emmanuel Saez, 2011. "Top Incomes in the Long Run of History," Journal of Economic Literature, American Economic Association, vol. 49(1), pages 3-71, March.
    2. Thomas Piketty & Emmanuel Saez, 2003. "Income Inequality in the United States, 1913–1998," The Quarterly Journal of Economics, Oxford University Press, vol. 118(1), pages 1-41.
    3. Andrew Leigh, 2007. "How Closely Do Top Income Shares Track Other Measures of Inequality?," Economic Journal, Royal Economic Society, vol. 117(524), pages 619-633, November.
    4. Philip Armour & Richard V. Burkhauser & Jeff Larrimore, 2013. "Deconstructing Income and Income Inequality Measures: A Crosswalk from Market Income to Comprehensive Income," American Economic Review, American Economic Association, vol. 103(3), pages 173-177, May.
    5. Peter Gottschalk & Timothy M. Smeeding, 1997. "Cross-National Comparisons of Earnings and Income Inequality," Journal of Economic Literature, American Economic Association, vol. 35(2), pages 633-687, June.
    6. 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.
    7. Facundo Alvaredo & Anthony B. Atkinson & Thomas Piketty & Emmanuel Saez, 2013. "The Top 1 Percent in International and Historical Perspective," Journal of Economic Perspectives, American Economic Association, vol. 27(3), pages 3-20, Summer.
    8. Alvaredo, Facundo, 2011. "A note on the relationship between top income shares and the Gini coefficient," Economics Letters, Elsevier, vol. 110(3), pages 274-277, March.
    9. Andrea Brandolini & Anthony B. Atkinson, 2001. "Promise and Pitfalls in the Use of "Secondary" Data-Sets: Income Inequality in OECD Countries As a Case Study," Journal of Economic Literature, American Economic Association, vol. 39(3), pages 771-799, September.
    10. Philip Armour & Richard V. Burkhauser & Jeff Larrimore, 2014. "Levels and Trends in U.S. Income and its Distribution: A Crosswalk from Market Income towards a Comprehensive Haig-Simons Income Approach," Southern Economic Journal, Southern Economic Association, vol. 81(2), pages 271-293, October.
    11. Anthony Atkinson & Thomas Piketty, 2007. "Top incomes over the twentieth century: A contrast between continental european and english-speaking countries," Post-Print halshs-00754859, HAL.
    12. Atkinson, A. B. & Piketty, Thomas (ed.), 2007. "Top Incomes Over the Twentieth Century: A Contrast Between Continental European and English-Speaking Countries," OUP Catalogue, Oxford University Press, number 9780199286881.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. repec:spr:soinre:v:135:y:2018:i:1:d:10.1007_s11205-016-1498-8 is not listed on IDEAS
    2. Metzing, Maria & Bartels, Charlotte, 2016. "An integrated approach for top-corrected Ginis," Annual Conference 2016 (Augsburg): Demographic Change 145818, Verein für Socialpolitik / German Economic Association.
    3. Stephen P. Jenkins, 2017. "Pareto Models, Top Incomes and Recent Trends in UK Income Inequality," Economica, London School of Economics and Political Science, vol. 84(334), pages 261-289, April.
    4. repec:bla:econom:v:84:y:2017:i:334:p:129-156 is not listed on IDEAS
    5. repec:bla:econom:v:84:y:2017:i:334:p:157-179 is not listed on IDEAS
    6. Chris Belfield & Richard Blundell & Jonathan Cribb & Andrew Hood & Robert Joyce, 2017. "Two Decades of Income Inequality in Britain: The Role of Wages, Household Earnings and Redistribution," Economica, London School of Economics and Political Science, vol. 84(334), pages 157-179, April.
    7. Brian A'Hearn & Nicola Amendola & Giovanni Vecchi, 2016. "On Historical Household Budgets," Rivista di storia economica, Società editrice il Mulino, issue 2, pages 137-176.
    8. A.B. Atkinson, 2016. "Pareto and the upper tail of the income distribution in the UK: 1799 to the present," CASE Papers /198, Centre for Analysis of Social Exclusion, LSE.
    9. Jonathan Cribb & Carl Emmerson, 2017. "Can’t wait to get my pension: ?the effect of raising the female state pension age on income, poverty and deprivation," IFS Working Papers W17/10, Institute for Fiscal Studies.
    10. Richard V. Burkhauser & Markus H. Hahn & Roger Wilkins, 2016. "Top Incomes and Inequality in Australia: Reconciling Recent Estimates from Household Survey and Tax Return Data," Melbourne Institute Working Paper Series wp2016n19, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.

    More about this item

    JEL classification:

    • C81 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Microeconomic Data; Data Access
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ese:iserwp:2016-03. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jonathan Nears). General contact details of provider: http://edirc.repec.org/data/rcessuk.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.