Search Results for: earnings

In 2008, the UK government set up a National Equality Panel to investigate inequality. “The Panel was asked to investigate the relationships between the distributions of various kinds of economic outcome on the one hand and people’s characteristics and circumstances on the other.” The panel delivered its report, An Anatomy of Economic Inequality in the UK, in January 2010. It “addresses questions such as how far up or down do people from different backgrounds typically come in the distributions of earnings, income or wealth?”

The aspects of inequality examined include: educational outcomes, employment status, wages and other sources of income (such as benefits) both for the individual and the household, and wealth. “In our main report, we present information on the distributions of these outcomes for the population as a whole. Where possible we indicate how they have changed in the last decade or more, and how the UK compares with other industrialised countries. But our main focus is on the position of different social groups within the distributions of each outcome.”

A major influence on people’s income was the income, wealth and class of their parents since these affected education, peer groups and a whole range of other life chances. This made it virtually impossible to achieve equality of opportunity.

The report also looks at policy implications. These include not just the redistribution of incomes, but also the more fundamental issue of how to create equality of opportunity. “The challenge that our report puts down to all political parties is how do you create a level playing field when there are such large differences between the resources that different people have available to them.”

So what has happened to inequality? What explanations can be offered? And what can be done to lessen inequality? The following articles look at the findings of the report and offer their own judgements and analysis.

Rich-poor divide ‘wider than 40 years ago’ BBC News (27/1/10)
The Big Question: Why has the equality gap widened even through the years of plenty? Independent, Sarah Cassidy (28/1/10)
UK is one of world’s most ‘unequal’ societies Irish Times, Mark Hennessy (28/1/10)
Unequal Britain: richest 10% are now 100 times better off than the poorest Guardian, Amelia Gentleman and Hélène Mulholland (27/1/10)
No equality in opportunity Guardian, Phillip Blond and John Milbank (27/1/10)
Has the wealth gap really widened? Guardian, Tom Clark (27/1/10)
Inequality in a meritocracy Financial Times, Christopher Caldwell (29/1/10)
Who wants equality if it means equal poverty? (including video) Times Online, Antonia Senior (29/1/10)
A Major miracle on equality Public Finance, Richard Reeves (29/1/10)
UK one of the worlds most unequal societies; report says The Sikh Times (29/1/10)
Only policies, not posturing, will bring down inequality Independent (28/1/10)

The Report
The full 457-page report can be accessed here.
A 44-page summary of the report can be accessed here.
A 6-page executive summary can be accessed here.
Click here for the charts and tables from the report.

Another good source of information on the distribution of income is the Annual Survey of Hours and Earnings published by the Office for National Statistics.


  1. How can we measure inequality?
  2. Outline the findings of the report.
  3. Why is inequality so high in the UK and why has it continued to deepen?
  4. Have tax credits helped to reduce inequality?
  5. To what extent are greater equality and faster economic growth compatible economic objectives? How are incentives relevant to your answer?
  6. What specific policies could be adopted to give greater equality of opportunity? Identify the opportunity costs of such policies.

Russia has been growing rapidly. Average earnings have recently been growing at 20% a year and consumption growth has not been far behind this. Moscow apparently has more ‘6-series BMWs’ than any other city in the world. With Vladimir Putin now the prime minister he has promised to rein in inflation and boost social spending on housing and infrastructure. So what are the prospects for Russia in the next decade?

Russia: giant of a new economic world order Observer (25/05/08)
Vladimir Putin pledges to transform economy of Russia into a world leader Times Online (9/05/08)
Putin in 2020 pledge on economy BBC News Online (8/05/08)


1. Assess the recent economic performance of the Russian economy.
2. Examine the importance of oil to the Russian economy. What can the Russian government do to reduce the dependence on oil revenues?
3. Discuss the importance of infrastructure and spending on other social capital for the development of the Russian economy.

The government has proposed charging a levy to people who claim non-dom (non-resident) status in the UK. This levy of £30,000 will be charged on people with non-dom status who choose to shelter their earnings in overseas tax havens. An intensive campaign against the tax has been launched by various elements of the media.

It’s hardly Bolshevism to propose taxing non-doms Guardian (9/2/08)
Treasury adviser Bob Wigley slams non-dom tax Times Online (10/2/08)
Nabbing the non-doms Times Online (10/2/08)
Jones breaks ranks to claim non-dom plan hits low-paid Guardian (9/2/08)
Non-dom crackdown could hit low-paid Guardian (8/2/08)


1. Explain the way in which the non-dom tax levy would operate. How would this levy be classified – progressive, regressive or flat-rate?
2. Assess the arguments for and against the imposition of a levy on non-doms.
3. Evaluate two alternative policies for the taxation of non-residents of the UK.

Independent school fees have generally risen faster than inflation and a relatively inelastic value of the price elasticity of demand seems to have led to their revenues increasing. Demand has stayed high despite the above-inflation fee increases. However, a recent report suggests that fees have risen relative to average earnings and that independent schools have become less affordable. This may, the report argues, make some schools relatively more vulnerable to a fall in the number of places demanded.

Public school fees ‘risk pricing parents out’ Guardian (18/9/2007)


1. Identify the main factors affecting the value of the price elasticity of demand for places at independent schools.
2. Discuss the extent to which the value of the price elasticity of demand for places at independent schools is likely to change as fees increase relative to average earnings.
3. Assess the extent to which competition in the market for independent schools affects the level of fees (the market price) and the value of the price elasticity of demand for places.