Occupations and British Wage Inequality, 1970s-2000s

Abstract

Occupations provide a central unit of analysis for economic inequality in stratification research for two main reasons. First, occupations are supposed to structure inequality. Second, occupations are supposed to proxy as a source of inequality. Although there was a 'massive rise' in British wage inequality, relatively little is known about the relationship between the occupations and growing British wage inequality, and the sparse empirical research is inconclusive. Since sociologists traditionally have tended to place a great deal of emphasis on occupations, we might expect the changing structure of occupations and changing occupational wages to play a key role in accounting for trends in overall British wage inequality. More recent strands of stratification theory, however, have challenged the idea that occupations structure economic inequalities, and argue that the link between occupations and wages might have been weakening over time, instead predicting that growing wage inequality mostly occurs within occupations. We decompose trends in British wage inequality into between-occupation and within-occupation components and show that, although most wage inequality is within occupations, it is inequality between occupations that accounts for the lion's share of changes in wage inequality trends. Furthermore, trends in between-occupation inequality cannot be 'explained away' by fundamental labour market changes such as rising educational attainment and the decline in collective bargaining. We also demonstrate what the rise in between-occupation inequality implies for the British 'big class' structure using the NS-SEC social class schema. We show that growing between-occupation inequality can be more or less described as growing between-class inequality. ACKNOWLEDGEMENTS

Occupational and Regional Mobility as Substitutes: A New Approach to Understanding Job Changes and Wage Inequality

“…In addition, we link our study to research that identifies occupations as a major source of stratification as we find occupational characteristics to influence mobility and thus to contribute to wage inequality (Bol and Weeden 2014;Ganzeboom and Treiman 1996;Hatt 1950;Kambourov and Manovskii 2009a;Mouw and Kalleberg 2010a;Weeden 2002;Williams 2012). We expect these mechanisms to become IAB-Discussion Paper 14/2015 more pronounced in the future as technological and institutional change alters job requirements, creates mismatches and thus increases incentives to become regionally mobile (Acemoglu and Autor 2011;Autor 2013;Fernandez-Macias 2012;Fernandez 2001;Oesch and Rodriguez Menes 2010;Wright and Dwyer 2003).…”

Cumulative Inequalities over the Life-Course: Life-long Learning and Social Mobility in Britain

“…But, in addition, it is also associated with three other important aspects of individuals' economic lives: income security, short-term income stability and longer-term income prospects (McGovern et al, 2007;Chan and Goldthorpe, 2007). Moreover, and contrary to popular belief, the increasing inequality in incomes evident in Britain over recent decades has occurred to a greater extent between rather than within social classes (Williams, 2013).…”

Wage Inequality Within and Between Occupations

“…If mid-wage groups (e.g., secretaries) decrease in size, and low-and high-wage groups grow bigger, overall wage inequality would increase, even with stable wage differences between the occupations. 4 Second, the mean wages in different occupations might change (Mouw & Kalleberg, 2010;Williams, 2013). In this scenario, high-paying occupations get higher wages, and low-paying occupations get lower wages.…”

“…The most attractive feature of variance of log wages for this research, though, is that it can be decomposed into within-and between-occupation inequality (Allison, 1978). The analytical approach is based on the framework for studying inequality suggested by Western and Bloome (2009) and similar to that used in previous empirical research on this topic (Mouw & Kalleberg, 2010;Williams, 2013). The analysis consists of three steps.…”

“…If occupations are this crucial to life chances and social inequalities, they probably have played some role in the development toward increasing wage differences. Researchers have established that the rise in wage inequality in the United States (US) (Mouw & Kalleberg, 2010) and United Kingdom (UK) (Williams, 2013) is found primarily between occupations, with slower growth of within-occupation wage inequality (Mouw & Kalleberg, 2010).…”