Labour market inequality

Wage and earnings inequality has been on the rise in the UK since the late 1970s / early 1980s, and with faster increases than comparator countries it is now one of the countries with the highest levels of wage and earnings inequality in the developed world. Labour market inequality arises in various forms: inequalities in employment opportunities, wages and hours worked, but also in other dimensions of employment, such as job security. This paper considers key factors that have shaped labour market inequality in the United Kingdom over the last four decades, with a focus on technological changes and skill demand, labour market institutions and contract regulation.