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

Abstract

We investigate household income/expenditure inequality using survey data for the United Kingdom from 1937 to 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 per cent or 10 per cent. 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 of 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 postwar wage differentials observed by other studies.