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

Mike Brewer and Liam Wren-Lewis

No 2012-17, ISER Working Paper Series from Institute for Social and Economic Research

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.

Date: 2012-08-29
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