Household structure, labour participation and economic inequality in Britain, 1937-61

Abstract

We investigate household income/expenditure inequality using survey data for the UK 1937- 1961. Previous studies employed tax unit or wage rate data. Between 1937/8 and 1953/4 we find little change in inequality for incomes below the top 5 or 10 percent. This is consistent with the tax unit data. By 1961 inequality was notably higher than in 1953/4. Three trends might account for this: growth in the shares on non-working and multiple-worker households, and in the proportion of non-manual jobs. Non-manual jobs are diverse in skills and earnings. We find the upward impact on inequality of the rise of non-working households is mostly offset by their being both smaller and poorer. Data limitations disallow evaluating the impacts of the other two trends, but they are consistent with steady post-war wage differentials observed by other studies.