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Wage inequality in the Labour years

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  • Joanne Lindley
  • Stephen Machin

Abstract

This paper studies changes in labour market inequality in the UK, with particular reference to what happened to wage inequality during the years of Labour government. The analysis uses micro-data through time to document what happened to overall wage inequality, as well as upper- and lower-tail wage inequality, relative to what went before. Simple supply and demand models of changing wage differentials by education group are used, so as to consider the drivers of relative demand shifts in favour of the more educated that underpin rising wage inequality. The changing role of labour market institutions is also discussed, and in particular the decline of unionization and the importance of the introduction of the national minimum wage in 1999 for the evolution of lower-tail wage inequality. Copyright 2013, Oxford University Press.

Suggested Citation

  • Joanne Lindley & Stephen Machin, 2013. "Wage inequality in the Labour years," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 29(1), pages 165-177, SPRING.
    • Handle: RePEc:oup:oxford:v:29:y:2013:i:1:p:165-177
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    File URL: http://hdl.handle.net/10.1093/oxrep/grt009
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    Citations

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    Cited by:

    1. Bryan, Mark & Bryson, Alex, 2016. "Has performance pay increased wage inequality in Britain?," Labour Economics, Elsevier, vol. 41(C), pages 149-161.
    2. Iva Valentinova Tasseva, 2021. "The Changing Education Distribution and Income Inequality in Great Britain," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 67(3), pages 659-683, September.
    3. Chris Belfield & Richard Blundell & Jonathan Cribb & Andrew Hood & Robert Joyce, 2017. "Two Decades of Income Inequality in Britain: The Role of Wages, Household Earnings and Redistribution," Economica, London School of Economics and Political Science, vol. 84(334), pages 157-179, April.
    4. Maheswaran, Hendramoorthy & Kupek, Emil & Petrou, Stavros, 2015. "Self-reported health and socio-economic inequalities in England, 1996–2009: Repeated national cross-sectional study," Social Science & Medicine, Elsevier, vol. 136, pages 135-146.
    5. Philipp Ehrl, 2014. "A breakdown of residual wage inequality in Germany," Working Papers 150, Bavarian Graduate Program in Economics (BGPE).
    6. Christian Dustmann & Yannis Kastis & Ian Preston, 2023. "Inequality and Immigration," CESifo Working Paper Series 10486, CESifo.
    7. repec:cep:spccrr:01 is not listed on IDEAS
    8. Lupton, Ruth & Hills, John & Stewart, Kitty & Vizard, Polly, 2013. "Labour’s social policy record: policy, spending and outcomes 1997-2010," LSE Research Online Documents on Economics 51070, London School of Economics and Political Science, LSE Library.
    9. Manning, Alan & Mazeine, Graham, 2024. "Subjective job insecurity and the rise of the precariat: evidence from the United Kingdom, Germany, and the United States," LSE Research Online Documents on Economics 114258, London School of Economics and Political Science, LSE Library.

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