U.K. cross-sectional wage inequality rose sharply in the 1980s, continued to rise moderately through the mid-1990s, and has remained essentially unchanged since then. As in the U.S., increases in within-group inequality account for a substantial fraction of the rise in wage dispersion during the period 1975-99. Compositional shifts in the occupational and industry structures of aggregate employment also had important effects on the evolution of wage inequality. The convergence of the wage distributions for men and women has, however, had a stabilizing effect on the overall wage distribution. Copyright 2002, International Monetary Fund
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