INTER- AND INTRA-REGIONAL WAGE INEQUALITIES IN THE UK: AN EXAMINATION OF THE SOURCES OF UK WAGE INEQUALITIES AND THEIR EVOLUTION

Wage inequalities in the UK and elsewhere have increased substantially over the last two decades and have remained in historically high levels throughout the 1990s.In this paper we perform a number of decompositions of wage inequalities and their changes and try to locate the sources of these inequalities.By far, changes in returns to skills, towards more inequality, are the main determinant of the marked increase in wage inequalities.Nevertheless, more than two thirds of these inequalities are found to be located within the same region and gender and occupational group, with the implication that other factors, possibly education and experience, among others, determine the level of wage inequalities.However, cross-regional differences in wage inequalities are by lot determined by differences in the occupational composition of the work-force and in the returns to skills.International and macroeconomic factors offer little to the explanation of cross-regional wage inequalities and their importance for overall inequalities.