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Accounting for Changes in Income Inequality: Decomposition Analyses for the UK, 1978–2008
Author(s) -
Brewer Mike,
WrenLewis Liam
Publication year - 2016
Publication title -
oxford bulletin of economics and statistics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.131
H-Index - 73
eISSN - 1468-0084
pISSN - 0305-9049
DOI - 10.1111/obes.12113
Subject(s) - economics , inequality , economic inequality , income inequality metrics , earnings , income distribution , demographic economics , labour economics , pension , investment (military) , finance , mathematics , mathematical analysis , politics , political science , law
We analyse income inequality in the UK from 1978 to 2009 in order to understand why income inequality rose very rapidly from 1978 to 1991 but then remained broadly unchanged. We find that inequality in earnings among employees has risen fairly steadily since 1978, but other factors that caused income inequality to rise before 1991 have since gone into reverse. 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 the period to 1991 have seen their incomes converge with others.