A comprehensive study of inequality was launched recently by the Institute for Fiscal Studies. We explore how data available from the UK Data Service helped underpin it and how it is already creating impact.
Inequalities open up incredibly early in life (often before formal schooling begins) and become entrenched over a person’s life course.
Without interventions, these early developmental gaps persist, widen, and shape long-term economic and social inequalities in adulthood.
These are key findings from a major review of UK inequality.
Funded by the Nuffield Foundation and lasting six years, the IFS Deaton Review of Inequalities maps how economic, social, and demographic disadvantages intersect across the UK.
By drawing on 28 different datasets made available by the UK Data Service, the review takes a multi-decade view of British society, showing how privilege and disadvantage build over generations, and where data can help drive real change.
Dimensions of inequality
The IFS Deaton review explored inequality from many angles, reviewing evidence in multiple areas. Here we pick out just some of what the data reveals across groups of dimensions researched.
Early childhood, families and education
How do family structures, levels of poverty and parental mental health affect a child’s cognitive and socio-emotional development? How do qualifications and choices at school influence lifetime inequalities?
The foundations of inequality are laid astonishingly early with researchers uncovering the effect of family factors on children as young as three.
Long before a child sets foot in a school, factors like family income, home environment, and maternal education significantly influence their cognitive and emotional development – a gap that remained largely unchanged between cohort studies from the 2000s and 2010s.
These early gaps tend to be cumulative.
The attainment gaps of children who start behind persist. Starting behind means children are less likely to achieve qualifications demonstrating core skills, i.e. GCSEs in English and Maths. This then acts as a barrier to access to higher qualifications and skilled employment.
For those moving into higher education, the financial return on university degrees vary depending on the subject studied, the institution attended, and the student’s socio-economic background.
To further investigate how data help understand and address the challenges in this area, we encourage you to explore our children and young people in data theme.
Jobs, benefits and public services
Why has high employment failed to eliminate in-work poverty and regional divides?
Britain’s modern labour market presents a paradox. While employment rates have reached record highs, real wages have stagnated since 2008. Meanwhile, insecure work patterns (including zero-hours contracts and solo self-employment) have expanded significantly.
National minimum wage increases have supported those who earn least, but reduced union membership has reduced collective bargaining power.
This, in turn, adds to the difficulties for lower-paid workers to increase their income without relying on benefits.
As a result, low-paid workers increasingly rely on state benefits to top up their incomes – meaning public funds effectively subsidise low-wage business models to keep families afloat.
The UK also faces inequalities in employment and wages between different parts of the country. This is largely driven by highly skilled workers and graduates being drawn to prosperous urban areas like London.
Gender
Why does a large gender earnings gap persist when women match or outperform men in education?
Men and women show similar career and earnings trajectories until parenthood, at which point a massive “child penalty” opens up for mothers. The child penalty accounts for over 80% of the gender earnings gap.
The data shows this gap isn’t caused by a lack of capability or ambition before parenthood. Instead, it is driven by reduced working hours, slower wage progression, high childcare costs, and structural policy incentives that continue to place the weight of unpaid domestic labour on mothers.
Race and ethnic inequalities
How do educational achievements among ethnic minority groups compare with their labour market outcomes?
Educational success does not guarantee equal rewards in the workplace.
Many minority groups now outperform the White British majority in school and university attainment. However, the data shows that they continue to face unexplained wage penalties, higher unemployment and occupational segregation.
Across different minority groups, there are substantial disparities in household wealth, poverty rates, and housing security.
Health
How do early-life conditions and social factors shape health across a lifetime?
Health inequalities begin early. Childhood nutrition, early material conditions, and family support directly influence adult cognitive development, educational success, and lifelong health outcomes.
Previous improvements in life expectancy have stalled since 2010, while deaths from drug use, alcohol, and suicide increased, particularly in Scotland.
Trade and globalisation
What are the localized impacts of global trade shocks on UK communities?
Globalisation brings lower prices for consumers, but the costs of trade shocks are often concentrated in specific places.
When cheap imports from countries such as China flooded the market, local manufacturing jobs and pay were hit hard.
These job losses caused lasting damage across whole towns, shrinking local revenue and triggering long-term economic decline. While shoppers gained cheaper goods, the workers who lost their jobs paid a heavy, lasting price.
Immigration
How does immigration impact native wages, public finances, and public perceptions?
Immigrants to the UK tend to be better educated than the native-born population but often face ‘occupational downgrading’ (taking jobs at a level below what they are qualified to do) when they arrive in the country.
Despite persistent political myths, empirical evidence demonstrates that immigration has had virtually no negative impact on wage inequality for UK citizens.
In fact, immigrants are net financial contributors to the UK economy. The research indicates that public opposition stems far more from broader cultural concerns than from actual economic competition.
Trends, top income inequality and tax policy
How are top incomes structured and taxed in the UK?
Headline inequality statistics appear relatively stable since the 1990s, but this masks a growing wealth gap and a massive intergenerational divide driven by homeownership and pension wealth.
The richest 1% still hold about 15% of all national income with most of their money coming from investments and business profits rather than salaries.
Because capital gains and investments are taxed at lower rates than salaries, the tax system creates incentives for wealthy people to restructure their income to pay less tax.
Political inequality
How do economic inequalities affect political participation and representation?
Economic inequality directly translates into political inequality.
Electoral participation is heavily skewed toward older, wealthier, and more educated citizens, with government policy often being more responsive to older, asset-owning demographics.
This leaves younger and lower-income groups feeling unrepresented and disengaged from the political process.
Attitudes to inequalities
How do the public perceive fairness?
People are generally more accepting of inequalities driven by talent and hard work, but strongly oppose inequalities caused by unfair structural advantages, discrimination, or background.
Crucially, language matters.
While most people are uncomfortable with deep economic gaps, public support depends heavily on how solutions are framed: talk of government “redistribution” often meets resistance, whereas policies framed as “taking practical measures” win far broader support.
What is wrong with inequality?
Why does inequality matter beyond simply ensuring basic material needs are met?
Deep economic gaps do more than divide incomes; they erode the foundations of a healthy society.
When wealth and power concentrate in too few hands, it distorts political influence and undermines the mutual respect required for democracy to function.
Unchecked inequality damages social cohesion. When structural barriers consistently lock out the same communities, it undermines public faith in fairness and limits opportunity for those left behind.
Across the dimensions
A review this broad cannot be completely represented in a blog post. To learn more about any of the dimensions of inequality the review investigated, we encourage you to peruse the evidence volumes and commentaries available in the review’s evidence hub.
Over the coming months, we plan to take a deeper dive into some of these dimensions and discover how the data has made deep understanding and analysis possible.
In our next post about the IFS Deaton Review of Inequalities, we will explore some of the review’s recommendations and how the review is already beginning to make a difference.
Meet the team
(Left) Finn Dymond-Green (They/Them) is the Director of Impact at the UK Data Service.
(Middle) Eve Little (She/Her) is the Research Impact and Engagement Manager at the UK Data Service.
Comment or question about this blog post?
Please email us!