Inclusive growth? The relationship between economic growth and poverty in British cities

Abstract

There is growing concern in many developed economies that the benefits of economic growth are not shared equitably. This is particularly the case in the UK, where economic growth has been geographically uneven and often biased towards already affluent cities. Yet there is relatively little evidence on the relationship between growth and poverty in the UK. This article addresses this gap with an analysis of the links between economic growth and poverty in British cities between 2000 and 2008. We find little evidence that output growth reduced poverty. While growth was associated with wage increases at the top of the distribution, it was not associated with wage growth below the median. And there was no relationship between economic growth and the low skilled employment rate. These results suggest that growth in this period was far from inclusive.