Mind the Gaps: The Evolution of Regional Inequalities in the UK 1982-1997

  • Gilles Duranton, Vassilis Monastiriotis, +10 authors Dan Trefler
  • Published 2001

Abstract

In this paper we apply earnings equations for UK regions over 1982-1997. We find strong evidence of rapid convergence across regions regarding the determinants of individual wages (ie regional fixed-effects, gender gaps and returns to education and experience). Data on average regional earnings, by contrast, point at a worsening of UK regional inequalities and a rise in the North-South gap. Education accounts for most of the discrepancy between aggregate divergence and disaggregated convergence. First, London gained because its workforce became relatively more educated over the period. Second, returns to education increased nation-wide, which favoured the most educated regions (ie London). Third, returns to education were i nitially lower in London but they (partially) caught up with the rest of the country. Had returns to education and their distribution across UK regions remained stable over the period, the UK North-South divide would have decreased. This paper was produced as part of the Centre’s Globalisation Programme Mind the Gaps: The Evolution of Regional Inequalities in the UK 1982-1997 Gilles Duranton and Vassilis Monastiriotis

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Cite this paper

@inproceedings{Duranton2001MindTG, title={Mind the Gaps: The Evolution of Regional Inequalities in the UK 1982-1997}, author={Gilles Duranton and Vassilis Monastiriotis and Susan Harkness and Melanie Dorson and Nick Gill and Angelo Melino and Barry McCormick and Henry Overman and Diego Puga and Andr{\'e}s Rodr{\'i}guez-Pose and Aloysius Siow and Nadia Soboleva and Dan Trefler}, year={2001} }