Measuring UK top incomes
Advani, A., Summers, A.
& Tarrant, H.
(2021).
Measuring UK top incomes.
(CAGE Working Paper 490).
University of Warwick.
& Tarrant, H.
(2021).
Measuring UK top incomes.
(CAGE Working Paper 490).
University of Warwick.
We compare two approaches to measuring UK top income shares—the share of income going to particular subgroups, such as the top 1%. We set out four criteria that an ideal top share series should satisfy: (i) comparability between numerator and denominator; (ii) comparability over time; (iii) international comparability; and (iv) practical sustainability. Our preferred approach meets three of these; by contrast the approach currently used to produce UK fiscal income series meets none of them. Changing to our preferred approach matters quantitatively: the share of income going to the top 1% is 2 percentage points higher, but rising more slowly, than under the alternative.