Informing policies to tackle inequalities

This research, undertaken by researchers at the Institute for Fiscal Studies (IFS), used data made available via the Office for National Statistics (ONS) Secure Research Service (SRS), which is being expanded and improved with ADR UK funding.

How have inequalities developed within and between different groups? How do processes, such as globalisation, and advancements, such as technological change, offset or reinforce the shaping of inequalities? IFS’s research on the nature of changing inequalities and the key forces that have been shaping them, are examining these pressing questions as they aim to inform and improve the quality of policymaking debates around economic issues.

IFS researchers led by Professor Sir Richard Blundell are using ONS SRS data to explore four key areas:

• Intergenerational differences in income and wealth
• The role of firm level innovation in boosting the wages of those in low-skilled occupations
• The impact of automatic enrolment in bringing different employees into workplace pensions
• The consequences of potential post-Brexit trade barriers on the distribution of wages.

Research methodology

IFS has a longstanding record of carefully applying cutting-edge methodologies to microdata to produce robust measurements that improve our understanding of economic relationships and speak to key issues of importance to policymaking.

Using various ONS datasets – including the Annual Survey of Hours and Earnings, the Wealth and Assets Survey and the Business Structure Database, for example - IFS have used innovative research methods, methodologies and analytical techniques utilising novel types of data, including data linking to create new insight.

Key findings

Some of the programme’s key findings:

• Should generations differ in their wealth accumulation? (October 2019) This research found those born between the 1930s and 1950s have seen generation-on generation increases in wealth, while those born more recently appear to have accumulated no more wealth than their predecessors had done by the same age.
• The innovation premium to soft skills in low-skilled occupations (January 2020) This research found lower wage workers in soft skill occupations experienced faster wage progression and longer firm tenures.
• Potential consequences of post-Brexit trade barriers for earnings inequality in the UK (August 2020) The findings of this research identified a relatively greater exposure to the negative consequences of higher trade costs of Brexit amongst blue collar workers that tend to be employed in industries that are regionally concentrated, meaning they have fewer other employment opportunities in their local areas.
• Who leaves their pension after being automatically enrolled?(March 2020) This research uncovered automatic enrolment into workplace pensions has particularly increased workplace pension saving for those on lower pay and for younger workers, compared to higher paid and older workers.

Research impact

The IFS’s programme of work on inequality and social inclusion is highly respected and frequently cited. The research findings from the programme were mentioned 165 times in Hansard, transcripts of Parliamentary debates, and IFS provided written and oral evidence 12 times to parliamentary committees. The Institute sit on various boards and committees, and in a 2019 ComRes cross-party survey of MPs and Peers, IFS were labelled the “most influential” think tank. The findings of one strand of this work were used by the Department for Work and Pensions to inform government policymaking regarding automatic enrolment into workplace pensions.

The IFS programme of research Informing policies to tackle inequalities won  the Programme Award as part of the ONS Research Excellence Awards 2020.