Trends in Real Income in Britain: A Microeconomic Analysis

Empirical Economics, No. 22, 1997

Posted: 24 Mar 1998

See all articles by Stephen P. Jenkins

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

Trends in real national income are typically assessed using aggregate indicators such as GDP per capita, or mean household income, whereas the income distribution literature focuses on trends in income inequality. By contrast this paper takes an integrated approach to real national income measurement; it uses methods incorporating both size and distributional considerations and applies them to household income microdata in order to measure changes in real income in the U.K. during the 1980s. A parametric class of decomposable real income indices is proposed which complements quasi-ordering methods such as rank and generalized dominance criteria by telling us how much real income increased over a period (if at all). The indices are also additively decomposable by population subgroup, a property which helps reveal who the gainers and losers were. The analysis also draws attention to the normative and statistical issues raised by the presence of a few very small incomes.

JEL Classification: D31, C43, I31

Suggested Citation

Jenkins, Stephen P., Trends in Real Income in Britain: A Microeconomic Analysis. Empirical Economics, No. 22, 1997, Available at SSRN: https://ssrn.com/abstract=69370

Stephen P. Jenkins (Contact Author)

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

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London, England WC2A 2AE
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Institute for the Study of Labor (IZA)

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

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+44 120 687 3374 (Phone)
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