Hostname: page-component-78c5997874-xbtfd Total loading time: 0 Render date: 2024-11-10T21:12:54.216Z Has data issue: false hasContentIssue false
  • English
  • Français

The Changing Picture of Earnings Inequality in Britain and the Role of Regional and Sectoral Differences

Published online by Cambridge University Press:  26 March 2020

Mark B. Stewart
Mark B. Stewart*
Affiliation:
University of Warwick
*
E-mail: Mark.Stewart@warwick.ac.uk.
Get access Rights & Permissions [Opens in a new window]

Abstract

This paper examines differences in inequality between regions and between sectors of the economy. The growth in overall inequality since the mid-1990s is found to have been driven primarily by that in London (with a smaller difference for the South East and East Anglia) and by that in the financial sector (with a smaller difference for the business activities sector). While these differences for London and the financial sector overlap to some extent, they also have significant separate influences once each other is controlled for. The changes in inequality in the rest of Britain and in the other sectors of the economy are numerically small and statistically insignificant.

Keywords

Earnings inequalitywage inequalityregional wage differencessectoral wage differencesinequality trendsJ31D31C31
Type
Research Article
Information
National Institute Economic Review , Volume 218 , October 2011 , pp. R20 - R32
Copyright
Copyright © 2011 National Institute of Economic and Social Research

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Footnotes

The author is grateful to the Office for National Statistics for permission to use the Annual Survey of Hours and Earnings data, made available through the Low Pay Commission. Responsibility for the analysis and interpretation of the data rests with the author and not the ONS or the LPC. Helpful comments on an earlier draft of the paper were received from two anonymous reviewers and Rebecca Riley.

References

Atkinson, A.B. (2008), The Changing Distribution of Earnings in OECD Countries, Oxford, Oxford University Press.CrossRefGoogle Scholar
Atkinson, A.B., Voitchovsky, S. (2010), ‘The distribution of top earnings in the UK since the second world war’, Economica, published online, forthcoming in print.CrossRefGoogle Scholar
Autor, D.H., Katz, L., Kearney, M. (2008), ‘Trends in U.S. wage inequality: re-assessing the revisionists’, Review of Economics and Statistics, 90, pp. 300–23.CrossRefGoogle Scholar
Autor, D.H., Manning, A., Smith, C.L. (2010), ‘The contribution of the minimum wage to US wage inequality over three decades: a reassessment’, NBER Working Paper 16533.CrossRefGoogle Scholar
Bell, B., Van Reenen, J. (2010), ‘Bankers' pay and extreme wage inequality in the UK’, Centre for Economic Performance, London School of Economics.Google Scholar
Bird, D. (2004), ‘Methodology for the 2004 Annual Survey of Hours and Earnings’, Labour Market Trends, November, pp. 457–64.Google Scholar
Economist, The (2011), ‘Regional inequality: internal affairs’, March 10.Google Scholar
Goldin, C., Katz, L. (2009), The Race Between Education and Technology, Cambridge, Harvard University Press.10.2307/j.ctvjf9x5xCrossRefGoogle Scholar
Jenkins, S.P., Van Kerm, P. (2009), ‘The measurement of economic inequality’, In Salverda, W., Nolan, B. and Smeeding, T.M. (eds), Oxford Handbook of Economic Inequality, Oxford, Oxford University press.Google Scholar
Katz, L.F., Autor, D.H. (1999), ‘Changes in the wage structure and earnings inequality’, In Ashenfelter, O., Card, D. (eds), Handbook of Labor Economics, Vol. 3, Elsevier.Google Scholar
Lemieux, T. (2006), ‘Increasing residual wage inequality: composition effects, noisy data, or rising demand for skill’, American Economic Review, 96, pp. 461–98.CrossRefGoogle Scholar
Machin, S. (2011), ‘Changes in UK wage inequality over the last forty years’, In Gregg, P., Wadsworth, J. (eds), The Labour Market in Winter: The State of Working Britain, Oxford, Oxford University Press.Google Scholar
Manning, A. (2011), ‘Minimum wages and wage inequality’, In Marsden, D. (ed.), Labour Market Policy for the Twenty-First Century, Oxford, Oxford University Press.Google Scholar
Office for National Statistics (2002), UK Standard Industrial Classification of Economic Activities 2003, London, The Stationery Office.Google Scholar
Plunkett, J. (2011), ‘Growth without gain? The faltering living standards of people on low-to-middle incomes’, Resolution Foundation.Google Scholar
Stewart, M.B. (2011a), ‘Quantile estimates of counterfactual distribution shifts and the impact of minimum wage increases on the wage distribution’, Warwick Economic Research Paper 985, forthcoming in Journal of the Royal Statistical Society, Series A.CrossRefGoogle Scholar
Stewart, M.B. (2011b), ‘Wage inequality, minimum wage effects and spillovers’, Warwick Economic Research Paper 965.Google Scholar
Van Reenen, J. (2011), ‘Wage inequality, technology and trade: 21st century evidence’, Centre for Economic Performance, Occasional paper 28.CrossRefGoogle Scholar