Real wages, wage inequality and the regional cost-of-living in the UK

Cinzia Rienzo

Empirical Economics, 2017, vol. 52, issue 4, No 7, 1309-1335

Abstract: Abstract This paper reassesses how estimates of wage inequality from 1997 to 2008 change when regional variations in the cost of housing in the UK are taken into consideration. In order to do so, the real wage is deflated by a specially constructed regional retail price index (RPI). Results show that although regional differences in the cost of living exist, they do not affect significantly the wage difference between workers with a graduate education and workers with a high school degree, and the change of this differential over time, while they affect regional differences in real wage growth. The regional RPI reveals that the national RPI underestimates the cost-of-living of workers in London, and the South East and overestimates the cost-of-living for the majority of the other regions.

Keywords: Cost-of-living; Wages; Wage inequality; RPI (search for similar items in EconPapers)
JEL-codes: E3 J31 (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (2)

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Working Paper: Real Wages, Wage Inequality and the Regional Cost-of-living in the UK (2010)
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DOI: 10.1007/s00181-016-1122-4

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