Downloads
We examine the distributional consequences of post-Brexit trade barriers on wages in the UK. We quantify changes in trade costs across industries accounting for input-output links across domestic industries and global value chains. We allow for demand substitution by firms and consumers and worker reallocation across industries. We document the impact at the individual and household level. Blue-collar workers are the most exposed to negative consequences of higher trade costs, because they are more likely to be employed in industries that face increases in trade costs, and are less likely to have good alternative employment opportunities available in their local labour markets. Overall new trade costs have a regressive impact with lower-paid workers facing higher exposure than higher-paid workers once we account for the exposure of other household members.
Authors

CPP Co-Director
Rachel is Research Director and Professor at the University of Manchester. She was made a Dame for services to economic policy and education in 2021.

Deputy Research Director
Peter joined in 2009. He has published several papers on the microeconomics of household spending and labour supply decisions over the life-cycle.

Working Paper details
- DOI
- 10.1920/wp.ifs.2020.2720
- Publisher
- The IFS
Suggested citation
R, Griffith and P, Levell and A, Norris Keiller. (2020). Potential consequences of post-Brexit trade barriers for earnings inequality in the UK. London: The IFS. Available at: https://ifs.org.uk/publications/potential-consequences-post-brexit-trade-barriers-earnings-inequality-uk (accessed: 14 June 2025).
More from IFS
Understand this issue

Rank of local authorities by average household income compared to rank by average consumption after housing costs
On average, London local authorities rank at the top of the income distribution, but are bottom of the net-of-housing consumption distribution.
11 April 2025

Trade Wars: The end of globalisation?
Rising tariffs and trade wars are reshaping global trade. Is this the end of globalisation—and what does it mean for the UK and the world economy?
4 June 2025

Average household consumption spending before and after housing costs, and mean weekly per-capita income, in different local authorities, 2018–2019
Londoners may have the highest average incomes, but their household spending once you account for housing costs is lower than other regions.
11 April 2025
Policy analysis

Four big decisions for the 2025 Spending Review
Spending Review 2025 will set detailed departmental budgets for most of this parliament. We examine the key choices facing the government.
1 June 2025

Which places have the highest standard of living?
Measuring living standards using average household spending gives a starkly different picture of regional inequalities than using average income.
11 April 2025

Where and how does the government spend its money?
Explore how and where the government spends money, and how this has changed over time, in all regions and nations of the UK
10 April 2025
Academic research

The impact of labour demand shocks when occupational labour supplies are heterogeneous
We develop a tractable equilibrium model of the labour market with heterogeneous labour supply elasticities by occupation and across occupation pairs.
8 April 2025

IFS Annual Lecture: Trade Wars and the Future of Globalisation
Professor Meredith Crowley delivered the 2025 IFS Annual Lecture.

Small area consumption estimates for local authorities in Great Britain
In this paper, we estimate average equivalised consumption measures across local authority districts in Great Britain.
11 April 2025