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Low Pay and Income in Urban and Rural Areas: Evidence from the British Household Panel Survey

Macaulay Institute, Craigiebuckler, Aberdeen, AB15 8QH, UK. a.gilbert@ macaulay.ac.uk

Euan Phimister

Department of Economics and the Arkleton Centre for Rural Development Research, University of Aberdeen, Aberdeen, AB24 3QY, UK. Fax: 01224 272 181. e.phimister{at}abdn.ac.uk

Ioannis Theodossiou

Department of Economics and the Centre for European Labour Market Research, University of Aberdeen, Aberdeen, AB24 3QY, UK. Fax: 01224 272 181. theod{at}abdn.ac.uk

This paper examines the extent of urban-rural differences in low pay and the link between low pay and low incomes using data on urban and rural residents from the British Household Panel Survey for 1991-98. The results suggest that, overall, urban wages were significantly less than accessible rural but significantly more than remote rural wages even after adjustments were made for differences in observed characteristics. A lower percentage of urban workers who experienced low pay were also resident in low-income households. Lower urban in-employment and in-self-employment poverty were found relative to poor remote rural households even after differences in the characteristics across the different samples were controlled for.

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