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

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  • Brewer, Mike
  • Wren-Lewis, Liam

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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  • Brewer, Mike & Wren-Lewis, Liam, 2012. "Accounting for changes in income inequality: decomposition analyses for Great Britain, 1968-2009," ISER Working Paper Series 2012-17, Institute for Social and Economic Research.
    • Handle: RePEc:ese:iserwp:2012-17
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    Cited by:

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    3. Bui, Tuan & Nguyen, Cuong & Pham, Phuong, 2015. "Poverty among ethnic minorities: transition process, inequality and economic growth," MPRA Paper 68924, University Library of Munich, Germany.
    4. H. Lehmann & M. G. Silvagni, 2013. "Is There Convergence of Russia s Regions? Exploring the Empirical Evidence: 1995 2010," Working Papers wp901, Dipartimento Scienze Economiche, Universita' di Bologna.
    5. Mumtaz, Haroon & Theophilopoulou, Angeliki, 2017. "The impact of monetary policy on inequality in the UK. An empirical analysis," European Economic Review, Elsevier, vol. 98(C), pages 410-423.
    6. Mike Brewer & Liam Wren-Lewis, 2016. "Accounting for Changes in Income Inequality: Decomposition Analyses for the UK, 1978–2008," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 78(3), pages 289-322, June.
    7. Azam, Mehtabul & Bhatt, Vipul, 2016. "Spatial Income Inequality in India, 1993-2011: A District Level Decomposition," IZA Discussion Papers 9892, Institute of Labor Economics (IZA).
    8. John Hills & Alari Paulus & Holly Sutherland & Iva Tasseva, 2014. "A lost decade? Decomposing the effect of 2001-11 tax-benefit policy changes on the income distribution in EU countries," ImPRovE Working Papers 14/03, Herman Deleeck Centre for Social Policy, University of Antwerp.
    9. Mumtaz, Haroon & Theophilopoulou, Angeliki, 2017. "The impact of monetary policy on inequality in the UK. An empirical analysis," European Economic Review, Elsevier, vol. 98(C), pages 410-423.
    10. Lars Osberg, 2014. "The Big Picture on Inequality Trends?," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 60(2), pages 400-403, June.
    11. Theophilopoulou, Angeliki, 2018. "The impact of macroeconomic uncertainty on inequality: An empirical study for the UK," MPRA Paper 90448, University Library of Munich, Germany.
    12. Salverda, Wiemer & Checchi, Daniele, 2014. "Labour-Market Institutions and the Dispersion of Wage Earnings," IZA Discussion Papers 8220, Institute of Labor Economics (IZA).

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