Accounting for Changes in Income Inequality: Decomposition Analyses for the UK, 1978-2008
Oxford Bulletin of Economics & Statistics, doi: 10.1111/obes.12113
49 Pages Posted: 2 Sep 2015
Date Written: September 1, 2015
We analyse income inequality in the UK from 1978 to 2009 in order to understand why income inequality rose very rapidly from 1978 to 1991 but then remained broadly unchanged. We find that inequality in earnings among employees has risen fairly steadily since 1978, but other factors that caused income inequality to rise before 1991 have since gone into reverse. 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 the period to 1991 have seen their incomes converge with others.
JEL Classification: H23, H53, I32
Suggested Citation: Suggested Citation