June 27, 2012
Improving skills among the workforce is seen as fundamental to achieving a more competitive economy and maintaining productivity.
Using data from the British Household Panel Survey this report investigates how projected improvements in skills levels in the UK economy between now and 2020 will affect rates of poverty and income inequality.
models the impact of skills on the probability of employment and on earnings derived from employment for working-age people;
uses estimates from these models to predict the distribution of earnings, and simulate the distribution of net household incomes, likely to arise from the distribution of skills by 2020; and
predicts the levels of poverty and income inequality likely to be engendered by the different distribution of skills.