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Two decades of income inequality in Britain: the role of wages, household earnings and redistribution

Chris Belfield (), Richard Blundell (), Jonathan Cribb (), Andrew Hood and Robert Joyce ()
Additional contact information
Chris Belfield: Institute for Fiscal Studies and Institute for Fiscal Studies
Robert Joyce: Institute for Fiscal Studies and Institute for Fiscal Studies

No W17/01, IFS Working Papers from Institute for Fiscal Studies

Abstract: We study earnings and income inequality in Britain over the past two decades, including the period of relatively “inclusive” growth from 1997-2004 and the Great Recession. We focus on the middle 90%, where trends have contrasted strongly with the “new inequality” at the very top. Household earnings inequality has risen, driven by male earnings – although a ‘catch-up’ of female earnings did hold down individual earnings inequality and reduce within-household inequality. Nevertheless, net household income inequality fell due to deliberate increases in redistribution, the tax and transfer system’s insurance role during the Great Recession, falling household worklessness, and rising pensioner incomes.

Keywords: Inequality; labour market; household earnings; social security (search for similar items in EconPapers)
JEL-codes: D31 E24 J3 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ltv, nep-mac and nep-pbe
Date: 2017-01-13
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Journal Article: Two Decades of Income Inequality in Britain: The Role of Wages, Household Earnings and Redistribution (2017) Downloads
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