Case study

Economic inequality in Wales

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Author: Rhys Davies, Wales institute of Social & Economic Research (WISERD), The research team included WISERD staff and other colleagues based at Bangor, Cardiff, Glamorgan and Swansea Universities.

Date: 8 August 2011

Type of case study: Research

About the research

The research provides the first examination of inequality within a devolved nation of the UK and will form the basis of future research that explores inequality in Wales in greater detail.

The research was commissioned by the Equality and Human Rights Commission in Wales to address the lack of regional information on inequality. The results will be available to the new government in Wales and allow them to design policies to deal with poverty and inequality based on sound, well-researched evidence.

The APS, which includes data derived from the LFS and additional responses provided by a Welsh government-funded boost to the LFS, was the key source of information used in the analysis of education, employment and earnings. This was supplemented by data from other surveys in order to provide a picture of income, poverty and wealth in Wales. The analysis consisted of descriptive and multivariate (regression) analysis. Many years of data from these surveys were merged together to provide sufficient sample sizes to support the analysis.

The research report found that the inequalities that existed between groups in the UK were also present in Wales, however Wales exhibits lower levels of overall earnings and income inequality as a result of the relative absence of highly paid private sector employment.

About the data

This research study used data from four datasets.

The Annual Population Survey (APS) combines results from the the Labour Force Survey (LFS) and the English, Welsh and Scottish Labour Force Survey boosts. Special licence data from the Welsh boost allowed the researchers to consider the relative economic circumstances of those in Wales who are protected under the 2010 Equalities Act on grounds of gender, ethnicity, disability and religious belief. The APS is one of the most comprehensive surveys conducted by the Office for National Statistics. Individuals provide information about their employment, education and skills, health and safety records, details about spells of unemployment and other personal characteristics.

Households Below Average Income, 1994/95-2008/09 (HBAI) uses household disposable incomes, after adjusting for the household size and composition, as a proxy for material living standards. In order to allow comparisons of the living standards of different types of households, income was adjusted to take into account variations in the size and composition of the households.

The Wealth and Assets Survey asks people in Great Britain about their assets and liabilities in order to estimate household and personal wealth. This includes information on property, financial, physical and private pension wealth as well as savings, debt, borrowing and arrears. The survey also asks people about their attitudes to debt, saving and retirement.

The Family Resources Survey (FRS) is a continuous survey with an annual target sample size of 24,000 private households. Households interviewed in the survey are asked a wide range of questions about their circumstances including receipt of Social Security benefits, housing costs, assets and savings.

Methodology

The main source of data used in the report was that derived from the Annual Population Survey. This was supplemented by data from other surveys in order to provide a picture of income, poverty and wealth in Wales. The analysis consisted of descriptive and multivariate (regression) analysis. Multiple years of data from these surveys were merged together in order to provide sufficient sample sizes to support the analysis.

Publications and outputs

The full report, An Anatomy of Economic Inequality in Wales, and other materials are now available.

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