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A Different Perspective on the Evolution of UK Income Inequality

Author

Listed:
  • Atkinson, Anthony B.

    (Nuffield College, Oxford)

  • Jenkins, Stephen P.

    () (London School of Economics)

Abstract

This paper scrutinizes the conventional wisdom about trends in UK income inequality and also places contemporary inequality in a much longer historical perspective. We combine household survey and income tax data to provide better coverage of all income ranges from the bottom to the very top. We make a case for studying distributions of income between tax units (i.e. not assuming the full income sharing that goes with the use of the household as the unit of analysis) for reasons of principle as well as data harmonization. We present evidence that income inequality in the UK is as least as high today as it was just before the start of World War 2.

Suggested Citation

  • Atkinson, Anthony B. & Jenkins, Stephen P., 2018. "A Different Perspective on the Evolution of UK Income Inequality," IZA Discussion Papers 11884, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp11884
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    References listed on IDEAS

    as
    1. 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.
    2. 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.
    3. Blundell, Richard & Joyce, Robert & Norris Keiller, Agnes & Ziliak, James P., 2018. "Income inequality and the labour market in Britain and the US," Journal of Public Economics, Elsevier, vol. 162(C), pages 48-62.
    4. 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.
    5. repec:oup:oxecpp:v:70:y:2018:i:2:p:301-326. is not listed on IDEAS
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    More about this item

    Keywords

    inequality; tax unit; household; Gini coefficient; income tax data; household survey data;

    JEL classification:

    • C46 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Specific Distributions
    • 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

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