Inequality

The top 1 per cent of earners enjoyed a real-terms increase of 117 per cent over the 25 years between 1986 and 2011, according to a new official analysis – compared with the average of 62 per cent, and with just 47 per cent for those in the lowest decile group.

The best-performing European countries in terms of social and economic outcomes have one thing in common – a large and active welfare state. That's the emerging policy conclusion of a major EU-funded research project on poverty and inequality.

Birmingham University has announced the launch of a Policy Commission on the Distribution of Wealth. The Commission, chaired by David Urquhart (Bishop of Birmingham), will review existing knowledge about the distribution of personal wealth across different groups in society.

The Commission will focus on three particular kinds of personal wealth: pensions; housing/property; and financial savings/investments. It will consider whether the outcomes of wealth inequality cause socio-economic problems and social divisions, or whether there are advantages to an unequal distribution of wealth – for example, in creating incentives for entrepreneurs or others to create economic growth.

Finally, the Commission will move on to consider policy options, such as how to spread opportunities to accumulate wealth; how to redistribute wealth; and how to mitigate any negative impacts of wealth inequality.

Welfare states have reduced the recent growth in income inequality by around two-thirds through benefit systems and social transfers, according to new study. In contrast, tax systems over the period examined actually contributed to greater inequality.

The paper investigates income distribution and redistribution attributed to social transfers and taxes across 20 developed countries from around 1985 to the mid-2000s, based on household income data from the Luxembourg Income Study. It differs from earlier studies in that the total population is taken into consideration, instead of just those of working age.