Substantial rise in inequality during the 1980s
Gini Coefficient
0.40
0.35
0.30
0.25
0.20
Source: IFS
Top of income distribution races away
6.00
Ratio
5.00
4.00
3.00
2.00
1.00
90/10
Source: IFS
50/10
99/50
Gini – Mid 80s
Gini - Mid 2000s
Source: OECD. Figures not directly comparable with those on other slides. Mid 80s Germany refers to West Germany.
OE
CD
ex
ic
o
M
US
A
Ire
la
nd
tra
lia
Au
s
Ita
ly
UK
ad
a
Ca
n
Ja
pa
n
an
ce
Fr
Ge
rm
an
y
0.50
0.45
0.40
0.35
0.30
0.25
0.20
0.15
0.10
0.05
0.00
Sw
ed
en
Gini Coefficient
The Gini: international comparisons
Real earnings growth
Sweden (1980-2005)
Avg annual
earnings growth
3.0
2.5
2.0
1.5
1.0
0.5
0.0
-0.5
-1.0
3.0
2.5
2.0
1.5
1.0
0.5
0.0
-0.5
-1.0
USA (1980-2005)
Source: OECD
Notes: Full-time male workers only
France (2000-2005)
Avg annual
earnings growth
Avg annual
earnings growth
3.0
2.5
2.0
1.5
1.0
0.5
0.0
-0.5
-1.0
Avg annual
earnings growth
UK (1980-2005)
3.0
2.5
2.0
1.5
1.0
0.5
0.0
-0.5
-1.0
Lowest
Income
Highest
Lowest
Income
Highest
Lowest
Income
Highest
Lowest
Income
Highest
Lowest
Income
Highest
Lowest
Income
Highest
Lowest
Income
Highest
Lowest
Income
Highest
Lowest
Income
Highest
Lowest
Income
Highest
Lowest
Income
Highest
Lowest
Income
Highest
Lowest
Income
Highest
Lowest
Income
Highest
Inequality (log variance x 1000)
350
Employment
Status
Health
300
Ethnic group
250
Education
200
Age
150
Gender
100
Household
type
Region
50
Residual
0
1968 1972 1976 1980 1984 1988 1992 1996 2000 2004
Source: HBAI Data (FES and FRS) and authors’ analysis
What we do not know (and why it matters)


How much can government affect inequality?
How much can government affect labour market
outcomes?