Growth in British wage inequality driven mainly by sharp wage increases in only a few professions, new study finds

The main reason for the growth in wage inequality in recent years is that pay in just a handful of professions has risen sharply, according to a new study.

The report, entitled Occupations and British Wage Inequality, 1970s-2000s, found that only 20 professions account for more than two-thirds of the rise in wage inequality among men, while just 12 professions are responsible for half the growth in inequality among women.

Among men, it was found that general managers including chief executives saw their wages rise the fastest in the past few decades, increasing from 12.07 an hour in 1975 to 49.20 in 1996, which means a rise in their annual salary from 25,106 to 102,336.

This group alone was responsible for more than 4% of the overall increase in wage inequality in the UK, but people in other already highly-paid jobs such as doctors or bankers also saw their salaries rise steeply.

The study, which was published in the European Sociological Review, was carried out by Dr Mark Williams of the London School of Economics and Political Science.

He divided the UK workforce into 366 occupations, examined how their pay levels increased between 1975 and 2008, and then looked at three different ways in which wage inequality is linked to occupations.

Dr Williams concluded that the growth in wage inequality was mainly driven by sharp wage rises in some professions, followed by the changing sizes of these professions and increasingly unequal pay levels.

He said: "My research clearly shows that the biggest single reason for the growth in inequality has been that highly-paid jobs have become even more highly-paid. This is also the first study to identify the professions which have had the biggest effect.

"It is very striking how just a handful of occupations, mostly managerial and professional, are responsible for more than half of the inequality increase.

"Previously many have argued that widening pay gaps within professions were the primary source of British wage inequality.

"This study shows that is not the case - indeed it's the least significant of the three mechanisms by which occupations can affect the inequality of wages."

Copyright Press Association 2012