The Distribution of Income in Ireland (2000) - Combat Poverty Agency

66 The Distribution of Income in Irelandgoes up only to 1994, but it provides a valuable comparativecontext in which to see the Irish experience up to that pointand beyond.Chapter 6The Distribution of EarningsBrian Nolan6.1 INTRODUCTIONIn this chapter we move from the distribution of income amonghouseholds to the distribution of the largest element in income,namely employee's earnings, among those employees. Sharplywidening inequality in earnings in the United Kingdom and theUnited States in the 1980s and 1990s has been a major preoccupationin recent research on inequality in those countries, andhas been attributed much of the responsibility for rising inequalityin the distribution of total income among households.Attempts to explain this increasing earnings dispersion havehighlighted rising returns to education and skill. 1 This in turnhas been attributed to a shift in demand towards more skilledlabour due to factors such as skill-biased technical change (Kateand Murphy, 1992) and globalisation and competition from developingcountries (Wood, 1994). 2 Some industrialised countrieshave experienced much smaller increases in inequality,however, while others again have maintained stability in theirearnings distributions (OECD, 1993 and 1996b), which has fo-See for example Gosling, Machin and Meghir (1994) and Schmitt (1995) forfoe UK, Levy and Mumane (1992) and Juhn, Murphy and Pierce (1993) for theUSA.2US studies assessing such explanations include Bound and Johnson (1992),B °rjas andRamey (1994), andBurtless (1995).