The Distribution of Income in the UK and OECD Countries in the Twentieth Century.

Distributional changes are an important part of the economic history of the OECD countries over the twentieth century. In the UK, income inequality in the 1970s was substantially lower than 40 years earlier, and is now much higher than in 1979. The pattern of change in the USA has similarities to that in the UK, but other countries have exhibited significant differences. In order to explain diversity of experience over time, and differences in income inequality across countries today, we need to recognize that the distribution of income is subject to a variety of forces, affecting earnings, wealth, and income. These forces include the policy choices made by governments affecting market incomes and fiscal redistribution. What we need to explain is why in some periods a number of these forces combine to produce episodes of rising, or falling, inequality. Any single theory, such as that based on a global shift of demand away from unskilled workers, cannot provide a fully adequate explanation. Copyright 1999 by Oxford University Press.