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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
Journal article | Economica

We study earnings and income inequality in Britain over the past two decades, including the period of relatively ‘inclusive’ growth from 1997 to 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.

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News
An article by IFS authors was the most downloaded in the journal Economica for 2017. The article, 'Two Decades of Income Inequality in Britain: The Role of Wages, Household Earnings & Redistribution', by Chris Belfield, Richard Blundell, Jonthan Cribb, Andrew Hood, and Robert Joyce was published...
Briefing note
The Department for Work and Pensions (DWP) has today published the latest official statistics on household incomes, covering the financial year 2015–16. IFS researchers have summarised the headline trends observed in the new data and placed them in historical context in order to understand better ...
Presentation
This presentation was given at an IFS briefing following the Autumn Statement 2016.
Presentation
This presentation was delivered at a seminar at the Economic and Social Research Institute in Dublin on 27 April 2017.