Labour market inequality
Giulia Giupponi and Stephen Machin
Wage and earnings inequality has been on the rise in the UK since the late 1970s / early 1980s, and with faster increases than comparator countries it is now one of the countries with the highest levels of wage and earnings inequality in the developed world. Labour market inequality arises in various forms: inequalities in employment opportunities, wages and hours worked, but also in other dimensions of employment, such as job security.
This chapter considers key factors that have shaped labour market inequality in the United Kingdom over the last four decades, with a focus on technological changes and skill demand, labour market institutions and contract regulation. Other important factors, such as the role of firm behaviour and monopsony power, are discussed in other parts of the Review (De Loecker, Obermeier and Van Reenen, 2022; Manning and Petrongolo, 2022).
15 March 2022
The IFS Deaton Review of Inequalities
This External report is part of the centre's Labour programme.
This publication comes under the following theme: Labour market inequalities: Causes and cures