IFS researchers were the first to put together consistent data on the distribution of household income since 1961 and, on that basis, to highlight the rapid rise in income inequality that had occurred during the 1980s - which is still to be unwound. These data remain the central source of historical data on income inequality in the UK and the IFS, as well as others, continue to use them extensively, including in our annual reports on living standards, poverty and inequality. More recently, we have sought to understand why income inequality on most measures has not risen since the early 1990s, and how that compares to other countries such as the United States.
Documenting and understanding trends in poverty, inequality and living standards are key to informing policy responses to the living standards challenges the UK faces. Our research in this area has included study of: how trends in the labour market feed through to changes in the income and expenditure of different groups of households; the insurance mechanisms available to households when faced with a labour market shock, and the extent to which tax and benefit changes have explained or mitigated trends over time. Our research has also considered the trends in inequality and living standards across generations, the determinants of those trends, and the impact on inequality and living standards of wealth transfers between generations.