Changes in earnings inequality and mobility in Great Britain 1978/9-2005/6

Richard Dickens and Abigail McKnight

Published October 2008

This paper examines changes in earnings inequality and mobility between 1978/9 and 2005/6 using a unique dataset that includes both those with secure patterns of employment and a wider group who experience periods without earnings. It finds significant increases in annual earnings inequality for both male and female employees. On most measures this is greater for men. When wider inequality is measured including periods of no earnings, inequality for men increases and for women it falls as employment among women increased. It finds little long-range mobility. There is some evidence of greater short-range upward mobility but also greater movement from the lowest earning decile since 1997/98. More sophisticated measures of mobility suggest falling mobility for men through the 1980s and 1990s but some greater mobility since 2002. For women there has been lower mobility and less variation over time. Increases in employment for women have led to more equalising mobility.