Sarah Voitchovsky

The Distribution of Top Earnings in the UK Since the Second World War

Much of the change in individual earnings has occurred at the top. This paper provides new evidence about the earnings distribution in the UK. The evidence is new in that it provides detail about what has happened within the top 10%, covering groups such as the top 1% and the top 0.5%. The aim is to set the recent rise in top earnings in historical perspective, and to make international comparisons. The evidence is new in that it covers the whole of the postwar period, allowing a contrast to be drawn with the ‘golden age’ of the 1950s.

Occupational downgrading and wages of New Member States immigrants to Ireland

This paper explores the importance of occupational downgrading in explaining the pay gap of New Member States (NMS) immigrants to Ireland by taking advantage of two data sources, the Census and the Survey on Income and Living Conditions (SILC). The study identifies biases in the coverage of NMS immigrants in SILC that dampen their estimated earnings disadvantage. Corrections to population weights are suggested. These adjustments have a significant impact on results, increasing both the size of the wage penalty of NMS immigrants and the extent to which the pay gap can be explained by occupational downgrading. A replication of published results for the UK reveals similar patterns of penalties for NMS workers in both countries. Factors that may explain the concentration of NMS workers in low-skill/low-wage occupations are discussed.

Top Incomes and the Gender Divide

In the recent research on top incomes, there has been little discussion of gender. How many of the top 1 and 10 per cent are women? A great deal is known about gender differentials in earnings, but how far does this carry over to the distribution of total incomes, bringing selfemployment and capital income into the picture? We investigate the gender divide at the top of the income distribution using tax record data for a sample of eight countries with individual taxation. We show that women are under-represented at the top of the distribution. They account for between a fifth and a third of those in the top 10 per cent. Higher up the income distribution, the proportion is lower, with women constituting between 14 and 22 per cent of the top 1 per cent. The presence of women in the top income groups has generally increased over time, but the rise becomes smaller at the very top. As a result, the gradient with income has become more marked: the under-representation of women today increases more sharply. Examination of the shape of the income distribution by fitting a Pareto distribution shows that at the end of the period women disappear faster than men as one moves up the income scale in all countries. In this sense, there appears to be something of a “glass ceiling” for women. In the case of Canada, Denmark, Norway and New Zealand, there appears to have been a reversal over time, with the slope of the upper tail having been steeper for women in the past. In seeking to explain this, we highlight the role of income composition, where we show that there have been significant changes over time, underlining the fact that it is not sufficient to look only at earned income.

When General Skills Are Not Enough: The Influence of Recent Shifts in Australian Skilled Migration Policy on Migrant Employment Outcomes

Although many countries are now using skilled migration to offset declining fertility and increased longevity, there is thin empirical evidence concerning the effects of alternative approaches to managing the skilled migrant intake. This study focusses on the effects on migrant labour market outcomes of Australia’s recent shift from a points-based “supply driven” model that favoured independent General Skilled Migrants, to a “hybrid model” that balances supply driven migration against Employer Sponsored “demand driven” migration. We find that the shift to a hybrid model of skilled migration resulted in substantively improved rates of employment amongst skilled migrants without an accompanying deterioration in the average distribution of occupational outcomes.

The Power of Self-Interest: Effects of Education and Training Entitlements in Later-Life

Education and training among the working-age population has become an increasingly important policy issue as working lives have lengthened and the pace of technological change has quickened. This paper describes the effects of a reform that replaced a supply-driven model, in which government selected the number and providers of publicly subsidised Vocational Education and Training (VET), with a demand-driven approach that broadened access to adult training and gave working-age individuals greater freedom of VET course choice. Difference-in-differences analysis reveals that the large-scale reform, which was introduced in the Australian state of Victoria from 2009, substantively increased participation in VET among the population aged 25-54, and corresponded with an improved match between VET courses taken and objective ex ante measures of labour market demand. Indeed, the scheme was so popular that it resulted in a budget over-run by 2012 of

Does the Profile of Income Inequality Matter for Economic Growth

400 million (AUD, on a total budget of

Inequality and Economic Growth

1.3 billion).