Accounting for Changes in Income Inequality: Decomposition Analyses for the UK, 1978–2008

34 Pages Posted: 26 Apr 2016

See all articles by Mike Brewer

Mike Brewer

University of Essex - Institute for Social and Economic Research (ISER)

Liam Wren-Lewis

Paris School of Economics (PSE)

Date Written: June 2016

Abstract

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.

Suggested Citation

Brewer, Mike and Wren-Lewis, Liam, Accounting for Changes in Income Inequality: Decomposition Analyses for the UK, 1978–2008 (June 2016). Oxford Bulletin of Economics and Statistics, Vol. 78, Issue 3, pp. 289-322, 2016. Available at SSRN: https://ssrn.com/abstract=2770174 or http://dx.doi.org/10.1111/obes.12113

Mike Brewer (Contact Author)

University of Essex - Institute for Social and Economic Research (ISER) ( email )

Wivenhoe Park
Colchester CO4 3SQ
United Kingdom

Liam Wren-Lewis

Paris School of Economics (PSE) ( email )

48 Boulevard Jourdan
Paris, 75014 75014
France

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