Accounting for changes in income inequality: decomposition analyses for Great Britain, 1968-2009

Publication type

ISER Working Paper Series

Series Number

2012-17

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ISER Working Paper Series

Authors

Publication date

August 29, 2012

Abstract:

We analyse income inequality in Great Britain over the period 1968-2009 in order to understand why income inequality rose very rapidly over the period 1978-91 and then stopped rising. We find that earnings inequality has risen fairly steadily since 1978, but other factors that caused inequality to rise in 1978-91 have since reversed. 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 1978-91 have seen their incomes converge with others.

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