The distribution of UK household expenditure, 1979-92

The rapid growth in income inequality in the UK over the 1980s has excited a good deal of interest and concern. A primary reason for this concern has been the widely- drawn conclusion that the living standards of the very poorest have at best failed to keep pace with the living standards of the rest of society. This report sheds new light on the living standards debate, by considering how household expenditure has changed over the period 1979-92. Examination of the expenditure of households appearing in the Family Expenditure Surveys of 1979-92 reveals some rather different trends from the well-documented changes in household incomes.

For richer, for poorer: the changing distribution of income in the United Kingdom, 1961-91

This article describes the changing patterns in income inequality and real living standards over the last 30 years. Whilst it is well documented that inequality has been rising since 1979,2 there is rather less information on how the pattern of inequality changed in the period up to 1979. This study is based on an analysis of detailed information on the incomes and characteristics of around 200,000 households between 1961 and 1991, and provides for the first time ever a consistent description of trends in household incomes over such a long period.

The Links between Income Distribution and Poverty Reduction in Britain

human development, aid, trade, security

Drivers and barriers to educational success : evidence from the longitudinal study of young people in England

This study examined why young people from poor families have lower attainment in school, are more likely to become NEET (Not in Education, Employment or Training) after compulsory education, and are more likely to participate in a range of risky behaviours whilst teenagers. The Longitudinal Study of Young People in England is combined with school and neighbourhood information to document the links between lower socio-economic position and poorer outcomes: identifying the key factors amongst parental education and material resources; school and neighbourhood peer groups; and the attitudes and beliefs of young people and their parents that help sustain those links

Children’s educational attainment and the aspirations, attitudes and behaviours of parents and children through childhood in the UK

Overview paper for the Special Issue of LLC

Explaining the socio-economic gradient in child outcomes: the intergenerational transmission of cognitive skills

Papers in this volume and elsewhere consistently find a strong relationship between children's cognitive abilities and their parents' socio-economic position (SEP). Most studies seeking to explain the paths through which SEP affects cognitive skills suffer from a potentially serious omitted variables problem, as they are unable to account for an important determinant of children's cognitive abilities, namely parental cognitive ability. A range of econometric strategies have been employed to overcome this issue, but in this paper, we adopt the very simple (but rarely available) route of using data that includes a range of typically unobserved characteristics, such as parental cognitive ability and social skills. In line with previous work on the intergenerational transmission of cognitive skills, we find that parental cognitive ability is a significant predictor of children's cognitive ability; moreover, it explains one sixth of the socio-economic gap in those skills, even after controlling for a rich set of demographic, attitudinal and behavioural factors. Despite the importance of parental cognitive ability in explaining children's cognitive ability, however, the addition of such typically unobserved characteristics does not alter our impression of the relative importance of other factors in explaining the socio-economic gap in cognitive skills. This is reassuring for studies that are unable to control for parental cognitive ability.

Which Skills Matter?

Cognitive Skills, non-cognitive skills, NCDS, Schooling, Labour Market Outcomes

UNDERSTANDING THE EFFECTS OF EARLY MOTHERHOOD IN BRITAIN : THE EFFECTS ON MOTHERS

This paper examines the socio-economic consequences of teenage motherhood for a cohort of British women born in 1970. We employ a number of methods to control for observed and unobserved differences between women who gave birth as a teenager and those who do not. We present results from conventional linear regression models, a propensity score matching estimator, and an instrumental variable estimator that uses miscarriage data to control for unobserved characteristics influencing selection into teenage motherhood. We consider the effects on equivalised family income at age 30, and its constituent parts. We find significant negative effects of teenage motherhood using methods that control only for observed characteristics using linear regression or matching methods. However once unobserved heterogeneity is also taken into account, the evidence for large negative effects becomes much less clear-cut. We look at older and younger teenage mothers separately and find that the negative effects are not necessarily stronger for teenagers falling pregnant before age 18 compared with those falling pregnant between 18 and 20, which could further suggest that some of the negative effects of teenage motherhood are temporary.teenage pregnancy ; miscarriage ; instrumental variables

Higher education funding reforms in England : the distributional effects and the shifting balance of costs

This paper undertakes a quantitative analysis of substantial reforms to the system of higher education (HE) finance first announced in 2004 and then revised again in July 2007. The reforms introduced deferred fees for HE, payable by graduates through the tax system in the form of income-contingent repayments on loans subsidised by the government. Lifetime earnings that have been simulated by the authors using innovative methods, are used to analyse the likely distributional consequences of the reforms for graduates. It is shown that graduates with low lifetime earnings will pay less for their HE than graduates higher up the lifetime earnings distribution compared to the system operating before the reforms. Taxpayers will bear substantial costs due to the interest rate and debt write-off subsidies. The extent to which the reforms are likely to shift the balance of funding for HE between the public and private sector is also analysed, as well as the likely distributional consequences of a number of variations to the system such as removing the interest subsidy from the loans