Earnings Inequality

Earnings inequality is a simpler concept than income inequality, because here we are looking at the range of earnings from just one source, employment, across all those individuals who have income from this source i.e. employees. So, earnings inequality demonstrates the gap between high and low-paid workers rather than covering the whole population.

A common measure of inequality in earned incomes is the P90/P50 ratio: the ratio of the earnings of the 90th percentile (the earnings which only 10% exceed) to the 50th percentile or median earnings. The higher this ratio is the more unequal earnings have become.


On this measure in Britain there has been a steady increase in earnings inequality since 1979 which, as in the case of income inequality, was most rapid during the 1980s.The ratio levelled off in the new millennium. In 2015 the earnings of the 90th percentile were close to twice those of the median.

Commentary – Earnings Inequality

The commentary reports the 90/50 ratio for earnings in select countries. And it examines one source of earnings inequality in the UK - the gender gap.
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Data

Sources
1. UK P90/P50 earnings ratio, from 1954, for all full-time workers on adult rates whose pay for the survey period was not affected by absence. Source: Chartbook of Economic Inequality.

2. Selected countries’ P90/P50 earnings ratio, from 1954. Source: Chartbook of Economic Inequality.

3. Great Britain’s UK Gender Pay Gap, 1997 to latest available based on the mean gross hourly earnings of full-time employees in the United Kingdom whose pay was not affected by absence. Source: Office for National Statistics 1997 to latest date.
Data series
Annual earnings inequality data
Variables: UK and selected countries annual P90/P50 ratios for earnings (1954-) ; United Kingdom annual (1997-) the Gender Pay Gap (%).
Download data
All the economic inequality data series are available in Excel xlsx format:
Inequality_Data.xlsx