The Deaton Review: Inequalities in the Twenty First Century

The IFS is launching a major new £2.5 million study of inequality in the UK, funded by the Nuffield Foundation and chaired by Nobel Laureate Professor Sir Angus Deaton.

Aiming to understand inequality not just of income, but of health, wealth and opportunity too, this five-year study will be one of the most ambitious of its kind. Our aim is to answer some of the most fundamental questions about the nature of inequality in the 21st century, the forces shaping it, and what can, and should, be done about it.

With Sir Angus in the chair, the panel overseeing the project includes world-leading experts in sociology, epidemiology, political science, philosophy and economics. We will commission work from many more leading experts to help us understand inequalities in outcomes by gender, ethnicity, geography, age and education. Our analysis will cover the full breadth of the income and wealth distributions – not just what is happening at the very top and very bottom.

Professor Sir Angus Deaton, Nobel Laureate and Chair of the Review said:

“I am delighted that IFS and the Nuffield Foundation have launched this review, and am honoured that I have been asked to chair it. It is an exciting prospect to work with so many distinguished scholars in so many disciplines to try to understand more about the nature of inequality, what it is about inequality that upsets so many people, and what might be done about it.”

The study will look to understand what concerns people about inequality, what aspects of it are perceived to be fair and unfair, and how those concerns relate to the actual levels of inequality and the processes by which they are created. It will identify the forces that drive inequalities – technological change, labour market institutions, education systems, family structures, globalisation – and the role of policy in shaping and mitigating them. We will undertake comparisons with other countries in the developed world to identify evidence on how different political institutions and policy responses have affected inequality in other jurisdictions. In addition to the role of taxes and benefits, we will examine the polices that drive the underlying distribution of income, such as those on trade, education, the labour market, competition, and regional development.

Paul Johnson, IFS director said:

“There can be few things more important than understanding what drives the inequalities we see in the UK, and what we can do to mitigate them. I couldn’t be more delighted that, in this 50th anniversary year of the IFS, we will be working with Sir Angus and other world leading experts to answer some of the most pressing questions facing not only the UK but the Western world as a whole.”

As well as advancing our understanding of how inequalities in the UK are changing and why, a major output from the study will be proposals for the most effective policy responses to different types of inequality. It will give governments, particularly the British government, a far clearer and more holistic view of the effectiveness of available policy options and trade-offs between them. We will publish new data and analysis on a regular basis over the course of the study, providing opportunities for engagement with government, researchers, the media, and the public.

Tim Gardam, Chief Executive of the Nuffield Foundation said:

“The nature of Inequality, and the forms it takes, are changing rapidly in the 21st century and it is an issue that lies at the heart of our political discourse. It is inherent to the increasingly vehement debate around concepts of fairness, rights, gender, ethnicity and identity. As an independent funder, the Nuffield Foundation sees the Deaton Review as a project central to our purpose to define and enhance opportunity and social well-being. The evidence and argument that will come from the thinking of such a distinguished panel, led by Sir Angus Deaton, has the potential to refashion what we know about inequality and present viable policy options for securing a more emancipated and inclusive society.”