The chapters in the first part of this book each concentrated on a different area of social policy. They examined policy, spending and outcomes since the crash in relation to a particular pillar of the welfare state (cash transfers, education, health, housing, employment), or to a given demographic group (young children). In this chapter we consider overall trends in socioeconomic differentials, including both economic inequality and the distribution of benefits in kind. These differentials reflect the combined effects of a range of social and economic policies, although they are also affected by wider factors over which the government has limited control, including demographic change and the operation of global economic forces.

One recurrent issue is that data on socioeconomic outcomes become available with a lag. For instance, the final picture of how the 1997 Labour government left the income distribution in 2010 only became available in 2012. The coalition left office in May 2015, by which time it had set in place the main rules governing the tax-benefit system – one of the major influences on the income distribution – up to 2015/16. But the data available to us at the time of writing and used here largely relate to periods up to 2013/14 or earlier. It will be 2017 before we are able to see a more definitive picture of the coalition’s legacy. The lag is particularly important because many of the coalition’s key policies – including cuts to some benefits – started having their main effects from 2013 onwards, while its initial policies protected the real value of benefits and tax credits up to that point (see Chapter Two, this volume).

This chapter begins by examining labour market outcomes – employment trends and wage disparities. The second section looks at household income overall, presenting data on income inequality and poverty. We then consider the distribution of benefits in kind, and how this has changed since the crisis. A final section focuses on changes in wealth and wealth inequality.

While we present some of the labour market trends by gender in this chapter, the following chapter looks in more detail at how the overall trends presented here vary between different groups, such as by age, housing tenure and region, as well as by gender.