Incomes Policies and Differentials∗

Abstract

This article examines the extent to which differentials have been influenced by successive periods of incomes policies. The reason for interest in this subject is that one of the major supposed disadvantages of incomes policies is that they ‘distort differentials’. However we rarely get an explanation either of what these differentials are or in what way they are distorted. In this article we use various statistics on wages and earnings and attempt to find out whether incomes policies have had any noticeable impact on differences in pay between groups of workers.