Commentary – Income Inequality

The UK is not the only country in which income inequality has increased since the 1970s. In fact in most advanced countries for which we have data Gini coefficients indicate an increase in income inequality. For the countries shown below France is the only country for which the Gini coefficient is lower in 2010 than it was in 1985.

Another indicator of income inequality is the proportion of total income earned by the top 1%. For countries for which we have (often incomplete) data this too shows rising inequality over the last 30 years. The share of the top 1%, after tending to fall from 1950 to 1980, then began to rise from 1980 to the present, giving a distinctive U-shape. This rise has been especially marked in the USA, Canada and the UK.