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Regional Earnings Inequality in Great Britain: Evidence from Fixed‐effects Regressions
Author(s) -
Dickey Heather
Publication year - 2007
Publication title -
labour
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.403
H-Index - 34
eISSN - 1467-9914
pISSN - 1121-7081
DOI - 10.1111/j.1467-9914.2007.00391.x
Subject(s) - earnings , economics , inequality , panel data , demographic economics , labour economics , econometrics , mathematics , mathematical analysis , accounting
. Earnings inequality in Great Britain has increased substantially over the last two decades at both the national and regional levels. This paper examines the determinants of regional hourly earnings over the period 1976–95 by estimating regional fixed‐effects earnings equations. Using panel data from the New Earnings Survey, individual‐specific heterogeneity is controlled for, and superior estimates of the factors affecting regional earnings are obtained. Increasing returns to skill, increasing industrial differentials, and increasing premiums for older workers are found to have contributed to increasing regional earnings inequality, and consequently rising earnings inequality at the national level.