Labour market inequality

Abstract

Wage and earnings inequality has been on the rise in the United Kingdom (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 article considers key factors that have shaped labour market inequality in the UK over the last four decades, with a focus on technological changes and skill demand, labour market institutions, and contract regulation.