We use cookies to provide you with the best possible website experience. This includes cookies that are necessary for the operation of the site, as well as cookies used for anonymous statistics, comfort settings, or displaying personalized content. You can decide which categories you want to allow. Please note that depending on your settings, some features of the website may not be available.

Cookie settings

These necessary cookies are required to enable the core functionality of the website. Opting out of these cookies is not possible.

cb-enable
This cookie stores the user's cookie consent status for the current domain. Expiry: 1 year.
laravel_session
Stores the session ID to recognize the user when the page reloads and to restore their login session. Expiry: 2 hours.
XSRF-TOKEN
Provides CSRF protection for forms. Expiry: 2 hours.
IZA Discussion Paper No. 11071
October 2017
What Really Happened to British Inequality in the Early 20th Century? Evidence from National Household Expenditure Surveys 1890–1961

forthcoming in: Economic History Review

We estimate income/expenditure inequality in Britain, exploiting five household surveys, spanning the years 1890 to 1961, some of which we recovered and digitised. After adjusting for differences in scope and sampling, we find little change in inequality among worker households over the period and that the three decades after World War 2 were probably the low point of survey-based inequality measures in the eight decades since the late 1930s. Our findings are consistent with the evidence from wage censuses on the overall variance of earnings, which only falls marginally over the period. We argue this relative steadiness was the result of opposing proximate forces, one being the decline in manual skill differentials due largely to changing wage-setting institutions. On the other side was growth in the employment share of non-manuals, with their higher skill and wage variance. We also argue that two demographic factors also played their parts. The sharp decline in fertility in the early part of the century reduced inequality, while the emergence of pensioner households in the 1950s tended to increase inequality in the lower end of the distribution. Lastly, our work suggests a substantial downward revision in the estimated size of the fall in inequality through World War Two. We find a fall of between one and two Gini percentage points between 1937/8 and 1953/4, compared with the often-quoted Blue Book estimate of almost seven Gini percentage points.

Communications
Mark Fallak
mark.fallak@liser.lu
+352 585-855-526
World of Labour
Olga Nottmeyer
olga.nottmeyer@liser.lu
+352 585-855-501
Network Coordination
Christina Gathmann
christina.gathmann@liser.lu

The IZA@LISER Network is a global community of scholars dedicated to excellence in labor economics and related fields, now coordinated at the Luxembourg Institute of Socio-Economic Research (LISER) following its transition from Bonn.

About IZA@LISER Network
Contact
IZA Network (Current Site Operator):

Luxembourg Institute of Socio-Economic Research (LISER)
11, Porte des Sciences
Maison des Sciences Humaines
L-4366 Esch-sur-Alzette / Belval, Luxembourg

IZA Institute (In Liquidation):

Forschungsinstitut zur Zukunft der Arbeit GmbH i. L.
Schaumburg-Lippe-Str. 5-9, 53113 Bonn. Germany
Phone: +49 228 3894-0 | Fax: +49 228 3894-510
E-Mail: info@iza.org | Web: www.iza.org
Represented by: Martin T. Clemens (Liquidator)