The impact of aggregate fluctuations across the UK income distribution.
In this article, we examine the response of earnings and employment to fluctuations in aggregate economic activity (GDP) across the income distribution. Using data from the UK's Labour Force Survey, we present evidence that aggregate fluctuations have economically significant but heterogeneous impac...
| Published in: | Oxford Economic Papers Vol. 78; no. 3; pp. 687 - 712 |
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| Main Authors: | , |
| Format: | Article |
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Oxford University Press / USA
Jul2026
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| Subjects: | |
| Online Access: | View this record in EBSCOhost |
| fields | @attributes: recordID: 1 pdfLink: plink: https://search.ebscohost.com/login.aspx?direct=true&db=ssf&AN=196419354&site=ehost-live header: @attributes: shortDbName: ssf uiTerm: 196419354 longDbName: Social Sciences Full Text (H.W. Wilson) uiTag: AN controlInfo: bkinfo: jinfo: jid: 00307653 OXE jtl: Oxford Economic Papers issn: 00307653 maglogo: N pubinfo: dt: Jul2026 vid: 78 iid: 3 pid: 622 pub: Oxford University Press / USA artinfo: ui: 196419354 10.1093/oep/gpag012 ppf: 687 ppct: 25 formats: tig: atl: The impact of aggregate fluctuations across the UK income distribution. aug: au: Key, Tomas Lenney, Jamie affil: Bank of England, Threadneedle Street, London, EC2R 8AH, United Kingdom su: United Kingdom Income distribution Employment Consumption (Economics) Business cycles Household surveys Macroeconomic models Wage theory Gross domestic product sug: subj: Income distribution Employment Consumption (Economics) Business cycles Household surveys United Kingdom Macroeconomic models Wage theory Gross domestic product keyword: business cycles copyrightHolder:Oxford University Press copyrightYear:2026 E32 GDP betas HANK income distribution inLanguage:en J31 J60 publisher:Oxford University Press sameAs:https://dx.doi.org/10.1093/oep/gpag012 unemployment business cycles copyrightHolder:Oxford University Press copyrightYear:2026 E32 GDP betas HANK income distribution inLanguage:en J31 J60 publisher:Oxford University Press sameAs:https://dx.doi.org/10.1093/oep/gpag012 unemployment ab: In this article, we examine the response of earnings and employment to fluctuations in aggregate economic activity (GDP) across the income distribution. Using data from the UK's Labour Force Survey, we present evidence that aggregate fluctuations have economically significant but heterogeneous impacts across the income distribution. While the earnings response is broadly similar across the distribution, further decompositions reveal important differences in the channels of transmission. Changes to hours worked and employment better explain the earnings response in the bottom half of the distribution, whereas changes to the hourly wage are more important in the top half. We incorporate these empirical estimates into the calibration of a Heterogeneous Agent New Keynesian (HANK) model for the UK and find that the heterogeneity we document amplifies the consumption response to aggregate shocks by around 10 per cent. pubtype: Academic Journal doctype: Article src: R language: English refInfo: copyright: @attributes: flag: N holdings: @attributes: islocal: N |
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