A Different Perspective on the Evolution of UK Income Inequality

22 Pages Posted: 29 Oct 2018

See all articles by A. B. Atkinson

A. B. Atkinson

University of Oxford - Nuffield College of Medicine

Stephen P. Jenkins

London School of Economics & Political Science (LSE) - Department of Social Policy and Administration; Institute for the Study of Labor (IZA); University of Essex - Institute for Social and Economic Research (ISER)

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.

Keywords: inequality, tax unit, household, Gini coefficient, income tax data, household survey data

JEL Classification: C46, C81, D31

Suggested Citation

Atkinson, A. B. and Jenkins, Stephen P., A Different Perspective on the Evolution of UK Income Inequality. IZA Discussion Paper No. 11884, Available at SSRN: https://ssrn.com/abstract=3273724

A. B. Atkinson (Contact Author)

University of Oxford - Nuffield College of Medicine ( email )

New Road
Oxford, OX1 1NF
United Kingdom

Stephen P. Jenkins

London School of Economics & Political Science (LSE) - Department of Social Policy and Administration ( email )

Houghton Street
London, England WC2A 2AE
United Kingdom

Institute for the Study of Labor (IZA)

P.O. Box 7240
Bonn, D-53072
Germany

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

Wivenhoe Park
Colchester CO4 3SQ
United Kingdom
+44 120 687 3374 (Phone)
+44 120 687 3151 (Fax)

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