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Abstract:

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Social Policies and Distributional Outcomes Research Paper
Flat-lining or seething beneath the surface? Two decades of changing economic inequality in the UK
Polina Obolenskaya and John Hills July 2019
Paper No' SPDORP04:
Full Paper (pdf) | Briefing Note (pdf)

JEL Classification: D30; D31


Tags: inequality; wealth; income; wages; distribution

This paper analyses what happened to economic inequalities in the United Kingdom in the two decades from 1995-96. In aggregate, inequality changes were unremarkable, especially by comparison with sharp increases in the 1980s. However, over the first decade economic outcomes improved across population groups, while over the second near-stagnation accompanied continuing high inequality. We show that the apparent stability of inequality in this period masked the way in which the nature and depth of economic inequalities changed after the economic crisis, leading to substantial differences between and within groups defined in different ways. Pervasively, younger adults lost out in the second decade compared to older ones. When population groups are defined in other ways (such as region, housing tenure or ethnicity) patterns are more complex, but with the worst-off in particular groups often being ‘left behind’.