Understanding income inequality

income inequality

2 thoughts on “Understanding income inequality

  1. Great infographic Alex, thanks. I was interested in the slight tailing off toward the end of the ‘noughties’ in the UK graph of the top 1% income share. Looking for a possible reason, I found that according to the most recent JRF/IFS poverty and inequality in the UK report, there were two main reasons for a fall in income inequality between 2007–08 and 2011–12 (despite a rise in earnings inequality): 1) earnings make up a larger fraction of overall income for those with the highest incomes, so falling real earnings had a bigger negative impact on incomes for richer households; 2) real increases in income from benefits and tax credits bolstered household incomes at the bottom of the income distribution to some extent. So according to the report authors the apparent reduction in inequality is likely to be a temporary phenomenon.
    Looking forward to more thought-provoking blogs and graphics!


    • Thanks Alan. Some interesting findings there and I’m not surprised to hear that the tailing off is probably temporary given that the rest of the evidence would suggest worsening inequality.


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