ESRC Data Archive Bulletin:
Income and Wealth Distribution Data

Introduction

In the United kingdom there are eight sources for data on the distribution of income and wealth. These are:

• The Surveys of Personal Incomes by the Inland Revenue (SPI) (Archive study number 2561)
• The CSO. Distributions, formerly known as the "Blue Book" distribution
• The Family Expenditure Survey (FES) (Archive study number 33057)
• The Effects of Benefits and Taxes data
• Households Below Average Income Data
• The New Earnings Survey (Archive study number 33186)
• The General Household Survey (GHS) (Archive study number 33090)
• The Distribution of Personal Wealth by the Inland Revenue
  

The SPI is produced annually and does contain regional information. We shall examine this source below (See section on SPI). The so called "Blue Book" distributions are an extension of the SPI beyond the tax net. The last estimations, done in 1988, refer to 1985/86. There is no indication that this data is to be continued. It never did, however, contain any regional break-down.

The Family Expenditure Survey does have a Northern Ireland dimension (see McGregor and Mckee in this issue). The two following sources above are extensions of the FES. They do not present regional break-down and there are no separate Northern Ireland equivalent publications.

The New Earnings Survey relates to Great Britain. There is, however, a separate Northern Ireland Survey (2211). The General Household Survey also is confined to Great Britain. Its Northern Ireland equivalent is the Continuous Household Survey (CHS), discussed by Miller in this issue. Though both these sources contain some income data, the method of collection - namely general recall at an interview -means that it is unreliable for income distribution analysis. For this reason we shall exclude this source from our survey.

Finally there have never been any separate official personal wealth distribution data for Northern Ireland. The Inland Revenue has produced annual personal wealth distributions since 1962. Initially the data referred to Great Britain. However, after the major changes in estimation in 1976 the data was extended to the United kingdom. The basis of the estimation is the estate multiplier method. The method and coverage are being continually improved and only recently the Inland Revenue has published new and consistent estimates for the UK as far back as 1976 (Good, 1990; Stewart, 1991).

The estate or mortality multipliers used by the Inland Revenue for Northern Ireland are the same as those for England and Wales. The do not, however, publish the estimates with a regional or country break-down. The mortality multipliers are published and could be applied to Northern Ireland estates from Inheritance Tax data. The problem here is that since 1974 when the Inland Revenue took over the Estate Duty Office for Northern Ireland from the Northern Ireland Department of Finance, there have been no separately published data on the estates of deceased persons for the Province. The upshot is that even private academic studies relate at latest to 1965-66 (Corley, 1962; Lyons, 1972).

The Survey of Personal Incomes (SPI)

The Inland Revenue annually samples, and has done so since 1962-3, over 60,000 tax cases. The sampling fractions vary from 1 in 3 for higher incomes to 1 in 2,000 for average income employees. In years before 1962-3 there were a series of surveys at five yearly intervals, often with samples of over 1 million cases (Stark, 1978). The sample until 1988-89 was undertaken by Tax Offices from their tax return records. Computerized databases are now used. The results which are now published in the annual Inland Revenue Statistics are presented after "grossing up".

The main problem with the SPI is that the coverage of investment income is incomplete, though the Inland Revenue since 1985/86 has endeavoured to allocate "missing" investment income. There are also problems with respect to part year incomes, some of which spuriously inflate low incomes - e.g. those of persons dying during the year and others which may be counted twice, such as those of women marrying during the year.

The Surveys are restricted to incomes subject to tax. The income recipient is the tax unit - that is single persons or married couples. Income units below the tax threshold are excluded as are certain types of non-taxable incomes - eg child benefits. At the national level distributions are available detailing income type, marital status, wives' income, deductions and so on. In the days when tax allowances could be claimed for children, family size information was also available.

Country distributions - Northern Ireland, Scotland, England and Wales - have always been available in every post-war survey. In the early quinquennial survey these provided similar detail to the national data. However, since 1962-3 with the smaller annual surveys, country data is restricted to analysis of total income and sub-divisions by three classes of earned income - profits and professional earnings; employment income and pensions. Data on investment income and deductions is not given at this level of dissaggregation. The Northern Ireland figures are presented in slightly more detailed form in the Northern Ireland Abstract of Statistics. There are also similar published data for all regions and summary data for countries, including Northern Ireland. In 1987/88 we estimate that the SPI accounted for 60% of total personal income in Northern Ireland or 73% of total personal factor income (excluding imputed rent).

The Inland Revenue inform us that they have from time to time supplied more detailed regional information, subject to confidentiality and statistical significance, to bona fide academic researchers. The anonymised data tapes from the SPI for 1985/86 are lodged with the ESRC Data Archive (SN 2561). It is planned to lodge later years. However, it is not possible to extract regional or Northern Irish data from the Data Archive material.

The Northern Ireland New Earnings Survey (NINES)

The history, conduct and structure of the Northern Ireland New Earnings Survey (NINES) is identical to that of Great Britain. It began in 1968 and since 1975 has been a 1% sample of all employees on a PAYE scheme. In fact all those with National Insurance Card numbers ending in a specific pair of digits (-14-) are sampled. The employers of such card holders are asked by the Inland Revenue - backed by statutory authority - to complete a questionnaire regarding pay before tax and National Insurance, bonuses, overtime, hours worked plus age, sex, occupation and industrial classification. All information refers to a specific week in April of each year (usually the second).

The response rate by employees is over 90%, such that accurate "grossing up" factors can be calculated from which it can be concluded that the "coverage" of full-time employees on adult rates whose earnings are above the deduction card limits for income tax and National Insurance is virtually complete. Though some returns relate to part-time employees and some even to those below the above thresholds, these are not considered reliable and are invariably omitted from the published survey results. The only other possible deficiency with the survey is that it is technically possible to double count persons who are on more than one PAYE scheme. The same National Insurance Card digit identification is adopted each year. This means that a substantial proportion of the sample is matched with the previous year (73% in the 1991 NIHES). This increases substantially the reliability of the estimates of year to year changes in earnings.

The Inland Revenue pass on the main Great Britain results to the Department of Employment who annually publish the New Earnings Survey - six volumes of considerably detailed statistics, one of which includes dissaggregation by the standard regions - metropolitan and country areas of Great Britain. Northern Ireland is excluded from all materjal in the GB NES. The GB NES database is lodged he ESRC Data Archive.

The results of the survey undertaken by the Inland Revenue for Northern Ireland are passed on as "hard copy" to the Northern Ireland Department of Economic Develop-who publish a separate NINES. The NINES usually appears six months after the first GB volume. It comprises slightly over 4,000 persons sample compared to over 15,000 for GB. Consequently the feasible degree of disaggregation for the NINES is a lot less than for GB.

Average weekly earnings data for full-time employees on rates is published separately by sex; manual/non-manual; all one digit with some two digit Standard Occupational Classification (SOC); all one digit major SIC classification and for those who are in Belfast travel to work area and the rest of the Province. Standard error estimates are also given in many instances.

Median and quartile published data are restricted to sex; manual/non-manual dissaggregation with the definitions varying from including and excluding overtime and those who pay was not affected by absence. A detailed distributon by 23 earnings ranges is, however, presented for males, females, boys and girls, both full-time and part-time ) and for all the sample as well as only for those whose pay was not affected by absence.

The Department of Economic Development (DED) will supply more detailed break-down on request to bona fide researchers and subject to constraints on statistical significance. The matched sample results are available also this way as are a greater break-down by occupation and industry. The DED will also supply "grossing-up" factors on request.

The NIHES is not deposited with ESRC Data Archive. However, a detailed study using the NINES for the years to 1983 by R. D. Harris is lodged with the Archive (2211)

References

Good, J. F. (1990) "Estimates of the Distribution of Personal Wealth", Economic Trends, October.
Stewart, J. (1991) "Estimate of the Distribution of Personal Wealth II: Marketable Wealth and Pension Rights of Individuals, 1976-1989", Economic Trends, November.
Corley, T. A. B. (1962) "The Personal Wealth of Northern Ireland 1920-1960", Journal of the Statistical and Social Inquiry Society of Ireland.
Lyons, P. M. (1972) "The Distribution of Personal Wealth in Northern Ireland", Economic and Social Review.
Stark, T. (1978) "Personal Incomes" in Volume VI SSRC/RSS Reviews of United Kingdom Statistical Sources , Pergamon Press.