John Hills

Inequality and the state

1. Introduction PART 1: INCOME INEQUALITY AND POVERTY IN BRITAIN 2. Income inequality in the UK: extent and trends 3. Poverty, deprivation, and exclusion 4. Why has the income distribution changed? 5. Income dynamics and social mobility PART 2: THE IMPACT OF POLICY 6. Social spending and the boundaries between public and private sectors 7. Tax and welfare 8. Distribution and redistribution PART 3: WHERE DO WE GO FROM HERE? 9. New Labour, welfare, and distribution 10. Constraints and pressures 11. Conclusions: The spending pit or the tax pendulum?

New inequalities : the changing distribution of income and wealth in the United Kingdom

List of figures List of tables List of contributors Acknowledgements 1. Introduction: after the turning point John Hills Part I. Income Distribution: 2. Seeking to explain the distribution of income A. B. Atkinson 3. The changing shape of the UK income distribution: kernel density estimates Frank A. Cowell, Stephen P. Jenkins and Julie A Litchfield 4. UK household cost-of-living indices, 1979-92 Ian Crawford 5. Cost-of-living differences between the regions of the United Kingdom Vani K. Borooah, Patrick P. L. McGregor, Patricia M. McKee and Gwyneth E. Mulholland Part II. Components of Income: 6. What has happened to the wages of men since 1966? Amanda Gosling, Stephen Machin and Costas Meghir 7. Womens pay and family incomes in Britain, 1979-91 Susan Harkness, Stephen Machin and Jane Waldfogel 8. More work in fewer households? Paul Gregg and Jonathan Wadsworth 9. Self-employment and the distribution of incomes Nigel Meager, Gill Court and Janet Moralee 10. Fairer or Fowler? The effects of the 1986 Social Security Act on family incomes Martin Evans Part III. Spatial Aspects: 11. Aspects of the changing geography of poverty and wealth Anne E. Green 12. Two nations? Changing patterns of income and wealth in two contrasting areas Michael Noble and George Smith Part IV. Income and Wealth: 13. Patterns of financial wealth-holding in the United Kingdom James Banks, Andrew Dilnot and Hamish Low 14. Home-ownership, housing wealth and wealth distribution in Britain Chris Hamnett and Jenny Seavers Bibliography Index.

Policy Implications of New Data on Income Mobility

The existence of income mobility may moderate concerns about growing inequalities, especially if income mobility has increased. However, the evidence for rising mobility is equivocal and its extent is not enough to offset the growth of cross-sectional inequality. There is a case for greater concern for, and different policies toward, those persistently or recurrently poor than those only temporarily poor, but the data analyzed here suggest that the bulk of low income observations come from the first two categories. Analysis of income mobility may help understand why peoples incomes follow different trajectories and how policy might affect this.

Unravelling housing finance: subsidies, benefits, and taxation

Part I: Background: Why is housing subsidized? Public spending on housing Trends in housing costs Part II: Subsidy systems: Subsidy principles and problems Local authorities: finance and control Local authority housing subsidies Housing association subsidies Other housing subsidies Part III: Housing benefits: Housing benefit: principles and problems Part IV: Taxation: Principles of housing taxation Housing taxation in Britain Part V: Evaluation: The economic return on local authority housing Distributional effects of the system Subsidies to local authorities and housing associations Patterns of incentives Part VI: Reform: The reform agenda Untangling housing finance.

Inclusion or Exclusion? The Role of Housing Subsidies and Benefits

This paper explores the reasons why the UK has ended up with such an extensive system of intervention in the housing market, particularly through providing subsidised council and housing association housing, and through Housing Benefit. The most important justification which remains valid is to enable those who would not otherwise be able to do so to afford to live in housing of acceptable quality, and to do so while avoiding the area polarisation which would result from the operation of the free market. However, the way in which social housing and subsidies operate in Britain today often reinforces rather than counters social polarisation and divisions. Looking ahead, as society becomes more affluent, including in an optimistic scenario those with low incomes, these problems may become even more acute as housing quality and consumer choice become more important. Systems of rationed provision with little tenant choice or control and no trade-off between cost and quality or location will look increasingly outmoded. The paper explores what could be done to reinvent the way in which we subsidise housing.

Shifting subsidy from bricks and mortar to people: experiences in Britain and West Germany

Abstract Since the early 1970s there has been a very similar shift in the balance of public spending on housing in Britain and Germany from general supply subsidies to demand subsidies (income related housing allowances and tax expenditures). This paper compares and contrasts the structures of those subsidy systems, the problems associated with them and current directions of change. Although there are close parallels in the shift of policy in both countries towards ‘targeting’ of explicit subsidies and in favour of greater profit‐making private provision, the environments in which this has occurred are very different. In particular, the lack of a functioning market for private rental housing in Britain—itself in part a function of tax and subsidy arrangements—severely limits the freedom of manoeuvre of British policy makers compared with their German counterparts.

Wealth in the UK: distribution, accumulation, and policy

This book examines key issues connected with the distribution of personal wealth in the UK. It studies why wealth is now such an important factor in social differences and public policy. It presents the most recent information on current wealth inequalities and a detailed discussion of trends in the distribution of wealth. It uses newly available data to compare wealth inequalities in the UK with the USA, Canada, and Sweden. It uses longitudinal data, which track the same people over time, to examine trajectories in wealth accumulation over the decade to 2005 and inequalities in inheritances over the same period. It looks at how parental wealth levels and peoples asset-holdings early in adulthood affect outcomes later in their lives. The final part looks at the way in which policies towards wealth-holding developed historically, and the contradictory ways in which a wide range of public policies relate to peoples wealth levels, including through taxation, means-testing, and the encouragement of saving, and discusses what the key issues for policy towards wealth and wealth inequalities now are. Personal wealth in the UK totalled L5.5 trillion by 2010 (L9-10 trillion if occupational pension rights are included). Inheritance flows are now equivalent to 4 per cent of national income each year. All households in the wealthiest tenth have more than 75 times the wealth of any of those in the bottom tenth. Absolute differences in wealth levels have increased substantially over the last 15 years, so wealth differences represent many more years of income than in the past. This makes them of great importance to life chances. This makes the book highly relevant for public policy, but also for academic and student understanding of a crucial dimension of social difference. As well as bringing together existing information on the area, the book contains considerable new analysis on wealth inequality, inheritance, and their impacts, drawing on work which is at the forefront of recent research. Contributors to this volume - John Hills John Hills and Francesca Bastagli Frank Cowell Francesca Bastagli and John Hills Eleni Karagiannaki and John Hills Abigail McKnight and Eleni Karagiannaki Howard Glennerster John Hills and Howard Glennerster John Hills and Howard Glennerster

Heading for Retirement? National Insurance, State Pensions, and the Future of the Contributory Principle in the UK

This article discusses the implications of the decline of National Insurance in Britain, witnessed by its declining share of social security spending and steady dilution of the ‘contributory principle’ on which it was originally based. This decline is not accidental: under governments of the Left, arguments for inclusion have predominated,non-contributory benefits expanded and contribution conditions softened; under those of the Right, limited resources have been focused on the poorest through means-testing. From this starting point, the strong arguments in principle for social insurance look much weaker. However, there are also reasons why the system has not been swept away, notably the way in which most of it concerns already accrued state pension rights. The effect of currentplans for statepensions is to restore something closer to a flat rate state pension, but with significant complexity. The article suggests a way in which a more transparent system could guarantee a total state pension at a fixed percentage of average earnings. Other National Insurance benefits could either be separated from pensions and absorbed within other working age social security, or the scope of National Insurance could be maintained, but based on a test of participation, not past contributions.

How to get better value from subsidy to housing associations

High rates of subsidy give small incentives to reduce costs. For that reason they are usually accompanied by detailed controls designed to avoid waste. In the case of housing associations, a single reform could encourage better value for money, and at the same time allow private finance to be introduced.

Tony Atkinson and His Legacy

Tony Atkinson is universally celebrated for his outstanding contributions to the measurement and analysis of inequality, but he never saw the study of inequality as a separate branch of economics. He was an economist in the classical sense, rejecting any sub-field labelling of his interests and expertise, and he made contributions right across economics. His death on 1 January 2017 deprived the world of both an intellectual giant and a deeply committed public servant in the broadest sense of the term. This collective tribute highlights the range, depth and importance of Tony’s enormous legacy, the product of over fifty years’ work.