Economics
Economic Inequality
Economic inequality refers to the unequal distribution of wealth, income, and resources within a society or between countries. It is often measured using indicators such as the Gini coefficient, which quantifies the extent of inequality within a population. Economic inequality can have wide-ranging social and economic implications, influencing factors such as social mobility, political stability, and overall economic growth.
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12 Key excerpts on "Economic Inequality"
No longer available |Learn moreWorld Social Report 2020
Inequality in a Rapidly Changing World
- Department of Economic and Social Affairs(Author)
- 2020(Publication Date)
- United Nations Publications(Publisher)
This growing evidence base has helped ensure consideration of income inequality as part of the international development agenda. This section summarizes what is now a broad and burgeoning technical literature on the topic. Considering that each indicator of Economic Inequality has strengths and limitations, the analysis uses several indicators to assess progress – or lack thereof. Section B illustrates how access to opportunities and resources continues to depend on group attributes such as ethnicity and race, migrant origin, and socioeconomic and disability status. The focus is on the dynamics of group-based inequality – that is, on whether development is equalizing opportunities among groups or, rather, is leaving some groups behind. Section C discusses why inequality matters, focusing on the effect of high and growing inequality on economic growth, poverty, social mobility and political stability. A. Economic Inequality People’s opportunities in life and the future of their children are largely shaped by their income and wealth. Now five years into implementation, the 2030 Agenda has focused the attention of the international community on the predicament of growing Economic Inequality. Real and sustained progress in addressing it, however, has eluded most countries. The evidence presented in this section shows that Economic Inequality has been on the rise in most high-income countries over the past 30 years but has declined in several low- and middle-income countries. Where inequality has risen, increases have 8 Target 10.1 is to progressively achieve and sustain income growth of the bottom 40 per cent of the population at a rate higher than the national average by 2030. INEQUALITY IN A RAPIDLY CHANGING WORLD 21 been largely due to the rapid rise in top incomes. Even though Economic Inequality among countries has declined, it is still more pronounced than that observed within countries. Chances in life continue to depend on the country in which a person is born.
eBook - PDF- Gillian MacNaughton, Diane Frey, Catherine Porter(Authors)
- 2021(Publication Date)
- Cambridge University Press(Publisher)
P A R T I I I Socioeconomic Rights and Economic Inequalities 10 Distributive Justice, and Economic and Social Rights joo-young lee I. Introduction Economic inequalities matter to human rights. There are two main reasons for concern about economic inequalities from human rights perspectives. First, economic inequalities matter to human rights because of their consequences. As Philip Alston, Special Rapporteur on extreme poverty and human rights (2014–20), stressed, “economic inequalities severely affect a range of civil, political, economic, social and cultural rights” (Alston 2015, 10). Research indicates that higher income inequal- ity correlates to higher rates of homicides and robbery (Elhar and Aitken 2011, 241–6; Melamed and Samman 2013, 7). Economic Inequality is often closely linked with “rising levels of crime and social unrest” (UNRISD 2010, 62). Further, income inequality is a major driver of inequality in health, education and nutrition (UNDP 2013, 150). High or growing inequality distorts decision-making processes and may threaten democratic participation because those who are worse off do not have the same access to policymaking forums (UNDP 2013, 52–3). High Economic Inequality is likely to lead to inequality in access to political power, engendering law and institutions that favor the interests of those with more wealth and influence (World Bank 2005, 2). This again reinforces inequality in access to quality education, health and public services and adversely affects equality of opportunity (World Bank 2005, 2). Although Economic Inequality negatively affects most of us, the most impoverished suffer most the effects of inequality “because their influence and capacity to exercise rights is diminished relatively, even if not absolutely, as others become wealthier and gain greater political and economic power, and in part because they are more 247 vulnerable to the harms associated with social unrest, crime and vio- lence” (Alston 2015, 12).
eBook - PDF- Neva Goodwin, Jonathan M. Harris, Julie A. Nelson, Brian Roach, Mariano Torras, Jonathan Harris, Julie Nelson(Authors)
- 2019(Publication Date)
- Routledge(Publisher)
Essential Topics for Contemporary Economics P A R T IV 247 As the United States economy began recovering from the Great Recession of 2007–2009, economic data indicated that the vast majority of all income growth was going to the richest Americans. From 2009–2012, over 90 percent of new income accrued to just the top 1 percent of income earners. As the economy recovered further, new income distribution was less lopsided, but still uneven. The top 1 per-cent captured over half of all income growth in the United States over the period 2009–2015. 1 The trend toward higher Economic Inequality is not limited to the United States. Over the last few decades, inequality has been increasing in most industrialized nations, as well as most of Asia, includ-ing China and India. And while inequality has generally been decreasing in Latin American and sub- Saharan African countries, these regions still have the highest overall levels of inequality. 2 Analysis of inequality, like most economic issues, involves both positive and normative questions. Positive analysis can help us measure inequality, determine whether it is increasing or decreasing, and explore the causes and consequences of inequality. But whether current levels of inequality are accept-able, and what policies, if any, should be implemented to counter inequality are normative questions. While our discussion of inequality in this chapter focuses mainly on positive analysis, we will also consider the ethical and policy debates that are often driven by strongly held values. 1. D EFINING AND M EASURING I NEQUALITY One of the final economic goals we discussed in Chapter 1 was “fairness.” Note that this goal is subtly, but fundamentally, different from “equality.” Income differences within a society may be considered fair even if they are somewhat unequal. Few desire a society in which everyone earns exactly the same income.
eBook - PDFThe Crisis Conundrum
How To Reconcile Economy And Society
- Mauro Magatti(Author)
- 2017(Publication Date)
- Palgrave Macmillan(Publisher)
We know that there is a close relationship between parental education and income status and their children’s eco- nomic and social outcomes (see, among others, Huggett et al. 2011). This, combined with the systematic relationship between inequality and economic (and social) mobility, has led to an increasingly divided society and persistent inequality (Stiglitz 2012). We cannot imagine a world without inequality, as inequality has accompanied every human society. Indeed, a certain level of inequality is necessary to provide the incentives to compete, undertake education 2 On Income Inequality: The 2008 Great Recession... 60 and take risks. But, as the latest experience has shown, beyond a certain threshold, inequality starts to undermine the stability and the efficiency of the economic system and to threaten our societies. This happens when inequality provides the means to maintain and take advantage of acquired positions and is the result of rent seeking (Milanovic 2011). Recent events have shown that there can be no divergence between the functioning of economies and societies. It has been made apparent that income inequality does matter and that distributional issues should be a major concern to both economics and macroeconomic policies. This has thrown up several theoretical and empirical challenges. We must begin from this point. References Alesina, A., and D. Rodrik. 1994. Distributive Politics and Economic Growth. Quarterly Journal of Economics 109(2): 465–490. Asian Development Bank. 2012. Asian Development Outlook, Confronting Rising Inequality in Asia. Manila, Philippines: Asian Development Bank. Atkinson, A.B. 2009. The Changing Distribution of Earnings in OECD Countries. Oxford: Oxford University Press. ———. 2015. Inequality: What Can Be Done? Harvard: Harvard University Press. Balakrishnan, R., C. Steinberg, and M. Syed. 2013. The Elusive Quest for Inclusive Growth: Growth, Poverty, and Inequality in Asia.
eBook - PDF- Owen O'Donnell, Pedro Rosa Dias, Owen O'Donnell, Pedro Rosa Dias, John A. Bishop, Juan Gabriel Rodríguez(Authors)
- 2013(Publication Date)
- Emerald Group Publishing Limited(Publisher)
INTRODUCTION Research on Economic Inequality is concerned with differences in incomes and wealth. Economic research on inequality casts its net more widely and is increasingly turning attention to differences in health. Google Scholar turns up 1,380 articles with ‘health’ and ‘inequality’ in the title, and a further 290 with ‘mortality’ and ‘inequality’, compared with 4,480 with ‘income’ and ‘inequality’. Most research on inequality focusses on the economic dimension but there is a very substantial body of work that looks at health. Inequality in health (often referred to as health disparity) is a core topic of the discipline of public health. But what motivates economists to shar-pen their tools in readiness for putting them to use on a subject matter differences in health that might be considered beyond their domain of expertise? It may be realisation that ill-health is a constraint on earnings power. Economic Inequality is, to an extent, a reflection of health inequal-ity. While this realisation may motivate some, and it is a strong stimulus for economic analysis of population health in low-income countries, it is unlikely to explain the growing interest in health inequality among econo-mists in recent years. A more probable explanation is the trend away from the more narrow focus on inequality in income to the more encompassing analysis of inequality in well-being, along with recognition that health, like economic resources, is a core determinant of welfare. Researchers inter-ested in establishing the extent to which well-being differs across indivi-duals, why it differs and whether the differences are narrowing or widening cannot but turn their analytical gaze on health inequalities. This 21st volume of Research on Economic Inequality series is devoted to the topic of Health and Inequality .
eBook - PDF- Medani P. Bhandari, Shvindina Hanna(Authors)
- 2021(Publication Date)
- River Publishers(Publisher)
27 Chapter 2 Inequality, a Historical Perspective: With Reference to Society, Politics, and the Economy G.B. Sahqani ABSTRACT This chapter consists of four parts. The first part looks at the origin of inequality using historical perspectives that look at society, politics, and the economy. Inequality is defined in generalized terms and according to specific discipline in the light of economic and political theories. In the second part, we look at what causes inequality, and how inequality has been persistent for centuries given multidisciplinary factors. In the third part, we discuss the relation of inequality with various sectors of the economy and factors which determine the strength of inequality. We look at stakeholders, the role of governments, and behavior of the free market for not realizing the prob-lems caused by inequality in the society. In the last part, we look at how fast-paced technological development will shape inequality and our future socio-economic life. 1. Introduction Inequality is the harsh reality of our socio-economic life, which we start realizing through the beginning of our social life. Socio-economic history tells us—from the days of social Darwinism during the gilded age to the pres-ent idea of a caring economy—equality and justice are the core objectives for the development of society. A long history of human struggle on social, 28 Social Inequality as a Global Challenge political, and economic fronts appears to be a never-ending movement. Even during the evolutionary stages, the structures of society and state institutions remained under constant change for the improvement of the standard of jus-tice and equality, but they failed to detach the legacy of inequality. Every industrial revolution is followed by development in new sectors of political and economic fields, and by virtue of that, a new class of bil-lionaires emerges every time. Similarly, the shape of inequality changes, but inflicted inequality never ends.
eBook - PDF- Martin Rama, Tara Béteille, Yue Li, Pradeep K. Mitra, John Lincoln Newman(Authors)
- 2015(Publication Date)
- World Bank(Publisher)
1 37 Why Inequality Matters E quality carries an intrinsic value for most of the world’s great religions, including Buddhism, Christianity, Hinduism, Islam, and Judaism, as it does for most other faith traditions and ideologies— religious or secular. Every normative theory of social arrangements that has stood the test of time also seems to demand equality of something. What is meant by equality, however, var-ies from one faith to another and from one theory to another (Sen 1992). Reviewing what inequality means to different people and summarizing the long-standing intellec-tual pursuits around the concept would be an exceedingly ambitious undertaking. Instead, this report makes the deliberate choice of focusing on inequality of well-being among households. But justifying this choice requires revisiting a major debate in modern develop-ment economics, namely inequality of oppor-tunities versus inequality of outcomes. In A Theory of Justice , Rawls (1971) argued for both equality of opportunities and equality of outcomes. Roemer (1998a, 1998b), in contrast, made a case for com-pensating people for disadvantages related to circumstances but tolerating the remaining inequality of outcomes. Roemer’s conceptual-ization shifted the attention of development economics toward equality of opportunities— often defined in terms of access to basic services. In South Asia, in particular, many children suffer from discrimination in access to basic services because of their socioeconomic cir-cumstances, such as their caste or their gen-der. But between these circumstances and their actual well-being as adults lies a range of additional factors affecting how individuals function. The extent of mobility determines how opportunity is converted into well-being at later stages in life. A range of shocks can pull individuals who had similar opportuni-ties as children in completely different direc-tions over time.
- P. Nel(Author)
- 2008(Publication Date)
- Palgrave Macmillan(Publisher)
The extent of social exclusion in developing countries, due to both deliberate strategies of exclusion used against minor- ity or marginalized ethnic and religious groups, rural women, and 124 Politics of Economic Inequality physically and mentally disabled individuals, or due to the unin- tended consequences of market imperfections, is well documented, as are the effects that these forms of exclusion have on worsening poverty levels. 5 What is not so well explored and documented in the social exclusion literature to date is the effect that vertical Economic Inequality has on the manifestations of social exclusion, both in its constitutive and instrumental variants. One reason for this is that it is challenging to distinguish clearly between social inequality in general on the one hand and social exclusion on the other. However, as Brian Barry has shown, it is possible to conceive of the causal relationship between the condition of interpersonal income/wealth dispersion and the process of social exclusion, if we consider how the distribution of income/wealth inequality affects people’s ability to share in the com- mon institutions on which the commonalities of fate that we call societies are based (2002). Income/wealth is of course only one of the attributes relevant here, and may not be the most important either. In the multi-ethnic, multi-lingual, multi-religious, and multi-caste societies of developing countries the ascriptive attributes of descent, language, belief, gender, and status play a significant part in determ- ining who’s in and who’s out and who earns/owns what. Keeping the degree of horizontal discrimination constant, it is nevertheless pos- sible to discern a distinct effect of income inequality on the degree to which people are included or excluded from both the market and public-forum institutions on which social reciprocity and cohesion depends.
eBook - PDF- Lucas Chancel, Thomas Piketty, Emmanuel Saez, Gabriel Zucman, Lucas Chancel, Thomas Piketty, Emmanuel Saez, Gabriel Zucman(Authors)
- 2022(Publication Date)
- Belknap Press(Publisher)
CHAPTER 1 Global Economic Inequality: insights WORLD INEQUALITY REPORT 2022 19 What is the level of global Economic Inequality today? ............... 20 Global income and wealth inequality between individuals: initial insights ......................................................................................... 20 Global income and wealth inequality between countries.............. 22 Income inequality varies significantly across regions ..................... 24 Differences in inequality are not well explained by geographic or average income differences.................................. 27 The geographical repartition of global incomes .............................. 27 The limited impact of redistribution on global inequality ............ 28 The complementarity between predistribution and redistribution ........................................................................................ 31 The extreme concentration of capital ............................................... 32 Box 1.1 Income and wealth inequality concepts used in this report ................................................................................. 38 Box 1.2 The WID.world and Distributional National Accounts Project ........................................................................................... 38 Box 1.3 The rich ecosystem of global inequality data sets ................. 40 Box 1.4 Impact of the Covid crisis on inequality between countries ...................................................................... 42 Box 1.5 Impact of the Covid shock on inequality within countries ........................................................................... 42 Box 1.6 What is the relationship between Gross Domestic Product, National Income and National Wealth? .................................. 46 Box 1.7 Comparing incomes, assets and purchasing power across the globe .............................................................. 47
eBook - PDF- Carsten Jensen, Kees Van Kersbergen(Authors)
- 2016(Publication Date)
- Red Globe Press(Publisher)
115 Chapter 9 Does Economic Inequality lead to political inequality? Chapters 6, 7 and 8 asked how the economy and the welfare state relate to inequality. Although inequality influences how both the economy and the welfare state work, our focus was mostly on how inequality is caused and shaped by the structure of the economy and welfare state arrangements. The overarching argument of the two chapters was that the degree to which the economy and the welfare state create inequality is fundamentally a political decision. In that sense, both chapters were concerned with how politics affects ine- quality. This and the next chapter, on the other hand, take a more sustained look at how inequality affects politics. The key question that we want to know the answer to is whether Economic Inequality leads to political inequality. Political inequality occurs when the preferences of some citizens sys- tematically are given more weight in the political process than those of other citizens. In this book, we are, of course, especially interested in whether or not those with more economic resources have a greater say than those with fewer. For many people, such political inequality is normatively wrong, because it seems to fly in the face of our intui- tion about how democracy ought to work. In the words of Almond and Verba (1963: 180), ‘[d]emocracy is a political system in which ordi- nary citizens exercise control over elites’. This highlights how democ- racy requires that ordinary people control the elite, not the other way around. Just as importantly, political inequalities may help explain why economic inequalities persist or widen. If those with most to win from pro-rich policies also disproportionately influence policy-making, it is easy to imagine that there will be a bias towards keeping or expanding these kinds of policies.
eBook - PDFDevelopment Economics
Theory and Practice
- Alain de Janvry, Elisabeth Sadoulet(Authors)
- 2021(Publication Date)
- Routledge(Publisher)
INEQUALITY AND INEQUITY | 181 model (see Chapter 8). But recent empirical evidence shows that poor people can have high rates of savings. In China, for example, incomes are still low, but the personal rate of savings is 38 percent, in part motivated by precaution due to lack of insurance and social security coverage. But this savings by the poor will only translate into investment if the poor have access to safe and profitable savings instruments, such as formal financial services, in ways that make their savings available for investment. On the negative side, the relationship between inequality and growth involves the role of credit market failures, whereby the poor lack collateral to access credit. This implies that wealth inequality reduces investment by the poor in productive projects, education, and insurance, at a cost to growth. Persson and Tabellini (1994) made the political argument that higher inequality pushes the median voter into demanding more redistributive policies, and hence higher tax rates that deter investment (Figure 6.12). The pessimistic view of the impact of inequality on economic outcomes through the political process was most comprehensively argued by Stiglitz (2012) in his recent book The Price of Inequality. Instead of using the theory of the median voter, as Persson and Tabellini do, he uses the theory of rent-seeking (that we will review in Chapter 21). Stiglitz’s argument is that concentrated economic power (inequality) leads to concentrated political power and, through rent-seeking, to changes in market and political rules favoring the top 1 percent in the distribution of income.
eBook - PDF- Linda Mooney, Molly Clever, Marieke Van Willigen, , Linda Mooney, Molly Clever, Marieke Van Willigen(Authors)
- 2021(Publication Date)
- Cengage Learning EMEA(Publisher)
The publication of French econo- mist Thomas Piketty’s (2014) book Capital in the Twenty-first Cen- tury has further increased public awareness of Economic Inequality as a social problem. Piketty’s book essentially argues that Economic Inequality will continue to in- crease to levels that threaten so- cial stability unless governments take such actions as enforcing a global wealth tax. In 2020, Economic Inequality emerged as one of the top ten is- sues identified by voters as “very important” to their vote in the 2020 election (Pew Research Cen- ter 2020). In the 2016 election, eco- nomic inequality did not break the 40 percent threshold to make it into the list of top issues for voters. Polling also indi- cates a decline in the strength of Americans’ belief in meritocracy; although a majority in 2018 expressed satisfaction with the opportunity for a person to get ahead by work- ing hard, this level of satisfaction was 13 percentage points lower than in 2001 and showed a sharp dip during the Great Recession of 2008–2010 (see Figure 6.2). Robert K. Chin/Alamy Stock Photo Occupy Wall Street protestors frequently use symbols associated with greed and luxury to focus attention on Economic Inequality. 45 40 35 30 25 20 15 10 5 0 2001 2002 2003 2004 2005 2006 2007 2008 2011 Years 2012 2013 2014 2015 2016 2017 2018 Persons Somewhat dissatisfied Very satisfied Very dissatisfied Somewhat satisfied Figure 6.2 Americans’ Views of Meritocracy, 2001–2018 Respondents Reporting Level of Satisfaction with the Opportunity for a Person in This Nation to Get Ahead by Working Hard. NOTE: Numbers do not add up to 100 due to “no opinion” responses. SOURCE: Gallup News Service 2018. Copyright 2022 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).
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